Why are secondary market prices relevant for a firm

Q: Use the straight line method to find the annual depreciation for a car that costs $18,000, has an…

A: Depriciation is allocation of total cost of assest over its useful life or in the ratio of benefits…

Q: reatment plant is to be constructed in Washington County. The initial installation will cost $40…

A: Capitalised cost = All Costs incidental to asset + Present value of future cost which is incurred in…

Q: At the end of each quarter, a life insurance client deposits Ph 6,176 for 5 years. If money is worth…

A: Quarterly deposit (P) = Ph 6,176 Interest rate = 5.3% Quarterly interest rate (r) = 5.3%/4 = 1.325%…

Q: TNPV profile Mutually exclusive projects Projects A and B, of equal risk, are alternatives for…

A: Concept. NPV is capital budgeting tool arrived by deducting initial investment  from present value…

Q: expansion purposes. You decided to issue semi- annual R1 000 bonds which pay a coupon of 10% for a…

A: Price of bond is present value of coupon payment and present value of par value of the bond at…

Q: Below are the annual returns provided by TSCM. Calculate average annual return experienced by an…

A:

Q: Companies of all sizes try to reduce business risks, create disaster recovery plans, and also…

A: Business risk Business risk is the risk of lowering the profits of a company. Any factor that…

Q: Assume CAPM is a correct model. Stock A's required rate of return is 12% and Stock B's required rate…

A: Stock -A Required rate of return is 12% Beta 1.2 Stock -B Required rate of return is 12% Beta 1.2…

Q: 19. An investment of P300 is made at the beginning of each month for 4 years and 3 months. How much…

A: A stream of equal cash flows (CF) paid or received periodically is termed as annuity. Annuity is…

Q: Continue using the data given on the last question. State your answers for IRR with a precisic…

A: IRR is the internal rate of return. It is the rate at which NPV (net present value) becomes nil.

Q: O The NPV and IRR methods, when used to evaluate two independent and equally risky projects, will…

A: The discounted technique of net present value (NPV) is used to assess the effectiveness of a…

Q: A company has a choice of two alternatives to improve their production process. Each alternative…

A: Explanation : When the two Alternative was given & we can select only one of the alternative…

Q: NPV and IRR Benson Designs has prepared the following estimates for a long-term project it is…

A: Net present value technique is a method to evaluate the profitability of a potential project. A…

Q: True or False? Retained Earnings represents the amount that stockholders have invested in the…

A: Another name for balance sheet is statement of financial position. It lists all the balances of a…

Q: A pension fund manager decides to invest a total of at most ​$35 million in U.S. Treasury bonds…

A: Total amount for investment is $35million Interest rate on US Treasury bond is 3% Interest rate on…

Q: Present Value of an Annuity Refer to each case in the table below to answer what are required in…

A: Given: Case Amount of annuity Interest rate Years A $12,000 7% 3 B $55,000 12% 15 C $700…

Q: Find the cash price of an Android-based phone plan if a customer pays PhP 999 monthly for 2 years at…

A: Monthly payment is PhP 999 Time period is 2 years Interest rate is 4.4% Compounded monthly To Find:…

Q: tive rate is 10% tive rate is 8% tive rate is 12%

A: Present value of financial liability i.e loan is the present value of future actual cashoutflows…

Q: If the market interest rate is 16% and the inflation rate is 10%, determine the real interest rate.…

A: Market interest rate = 0.16 Inflation rate = 0.10

Q: What is the company's WACC? (Do not round intermediate calculations and enter your answer as a…

A: WACC refers to the joint cost of company's capital from all the sources of the company. It includes…

Q: You have $2,100 to invest for 2 years. Which account should you choose to have the largest account…

A: Future Value: It is the future worth of the current amount and is computed by compounding the…

Q: Given the following information, compute the current ratio Cash $ 120,000 Accounts receivable…

A: Current ratio = Current assets/Current liabilities

Q: Raymund just won the lottery. He can get his prize either in the form of $40,000 at the end of each…

A: Prize money at the end of each year us $40,000 Single amount paid immediately is $500,000 Interest…

Q: Amy will need PHP 1.75M on July 4, 2015. To prepare for this, she places equal deposits at the end…

A: Future value required on July 4 2015 (FV) = PHP 1,750,000 Interest rate (r) = 8% Number of annual…

Q: Which of the following is a good choice for a manager interested in fostering the cooperation of two…

A: At times the managers of companies may have to seek cooperation between different departments of the…

Q: Investments Quick and Slow cost $1,000 each, are mutually exclusive, and have the following cash…

A: NPV of Q = 1100*(1+i)^-1 - 1000 = 1100*1.07^-1 - 1000 = 1028.037 - 1000 = $28.0 NPV of S =…

Q: Match the following credit terms with the correct description. APR [Choose ] [Choose Known as the…

A: As per Bartleby guidelines, If multiple questions are posted , only first 1 question will be…

Q: 1)The 11% convertible debt of Grey plc is convertible in four years’ time at a rate of 25 shares per…

A: (Answer 1) Given in the question, Convertible bond market price,=Interest p.v. + conversion interest…

Q: Airlines offer an example of an industry in which the degree of operating leverage is fairly high.…

A: Leverage There are two types of leverage as mentioned below. Financial leverage Operating leverage…

Q: You have decided to retire and want to sell your shares in a closely held, all equity firm. The…

A: Share repurchase is referred to as a transaction where a company buys back its own shares from the…

Q: due at the end of 2 years and 9 mon 26. Find the semi-annual payment at the end of every six months,…

A: An annuity is a payment plan where future periodic payments are made in exchange for a lump sum…

Q: Your textbook presents portfolio management in the context of projects. The author of Ch. 1 states…

A: The project portfolio management is a system of evaluating different projects and based on that,…

Q: Determine the expected present worth of the following cash flow series if each series may be…

A: Expected present worth can be defined as the mean or average value of the given variables which…

Q: B. COMPOUND INTEREST 7. Accumulate P15,000 for 10 years at 7% compounded (a) quarterly. (b)…

A: Time value of money denotes that due to interest rate factor, the future sum of money has more worth…

Q: a. Calculate the yield to maturity for a bond with a maturity of (i) one year; (ii) two years; (iii)…

A: YTM (Yield To Maturity): It is the total expected rate of return for a bondholder when all the…

Q: 76. If 60% financing is available on a certain income property at a loan constant of 11%, what…

A:

Q: Clifford, Inc., has a target debt-equity ratio of .80. Its WACC is 9.1 percent, and the tax rate is…

A: WACC is a weighted average cost of all the sources of capital. It is equal to the sum of products of…

Q: Assume the mean and standard deviation of sample returns are​ 8% and​ 10% respectively. Assuming…

A: Sample returns are 8% Standard deviation is 10% Returns are normally distributed To Find:…

Q: Stock W's standard coefficient of variance (CV) is Stock W’s Sharpe ratio assuming the risk-free is…

A: 1. Calculation of Stock W's Expected return and Standard Deviation State of Economy Probability…

Q: A stock is expected to pay a dividend of $1.00 at the end of the year (i.e., D1 = $1.00), and it…

A: Next dividend (D1) = $1 Growth rate (g) = 0.09 Required return (r) = 0.14 Stock's expected price 2…

Q: An investor makes a single deposit of 10,000 into fund A for 10 years which earns a 6% effective…

A: Here,

Q: I. Find the value (using Binomial Tree) of a European style call option on an underlying stock which…

A: Given, Finding the value of  the option using the binomial tree below.

Q: Compute the nominal annual rate of interest compounded quarterly at which $300.00 paid at the end of…

A: Solution:- When an equal amount is deposited each period at end of period, it is called ordinary…

Q: Required: 1. Calculate the payback period for each product. 2. Calculate the net present value for…

A: Payback period refers to the period within which the sum invested by the company in a project will…

Q: Why does the Government bond market play a central role in New Zealand’s capital markets? What are…

A: A government bond is issued by the government to raise funds. It supports and meets the government…

Q: man investment project, the initial cost of investment is $400,000. The annual revenues are expected…

A: We will have to use different tools of capital budgeting here. Simple payback and the internal rate…

Q: My question is for a synthetic call option why do we need to borrow the present value of the strike…

A: Synthetic calls and synthetic puts are the two types of synthetic options available. Both forms of…

Q: how a firm might use a commodity derivative to reduce risk in its business? please include a…

A: In the world of derivatives, options etc. commodity derivatives are an important concept.…

Q: 11.4 CAPM Suppose the risk-free rate is 8 percent. The expected return on the market is 14 percent.…

A: Capital Asset Pricing Model (CAPM): CAPM is the method of calculating the expected return on…