Develop a strategic plan for investing excess funds that a corporation currently has available. Evaluate investment options available, demonstrating an understanding of various types of investments.
|
Jand, Inc., currently pays a dividend of $1.40, which is expected to grow indefinitely at 5%. If the current value of Jand’s shares based on the constant-growth dividend discount model is $36.16, what is the required rate of return?
|
The PMBA Corp (beta = 1.3) is trying to determine it cost of equity. You have been asked to give the cost of equity using a variety of methods. The methods to be used are the CAPM, and the DCF model. Calculate the three costs on equity. Explain the d..
|
You invested $10,000 in a mutual fund at the beginning of the year when the NAV was $32.24. At the end of the year the fund paid $0.24 in short-term distributions and $0.41 in long-term distributions. If the NAV of the fund at the end of the year was..
|
Trigen Corp. management will invest cash flows of $1,232,048, $704,110, $1,253,154, $818,400, $1,239,644, and $1,617,848 in research and development over the next six years. If the appropriate interest rate is 7.45 percent, what is the future value o..
|
Stock X has an expected return of 0.11. It has a beta estimated at 0.9, a risk-free rate of 0.03 and a risk premium of 6.3. Its variance of returns is 0.0154. All returns here are expresed as decimals, not percentages. What is its coefficient of vari..
|
What steps would you follow in order to take advantage of the following arbitrage opportunity (if there is one)? Security A costs $100 and pays $110 in 2 years. Security B costs $100 and pays $109 in one year. You know that in a year with $109 you ca..
|
Your credit card charges an interest rate of 2% per month. You have a current balance of $1000, and want to pay it off. Suppose you can afford to pay off $100 per month. What will your balance be at the end of one year?
|
Bridgeway Pharmaceuticals manufactures and sells generic over-the-counter medications in plants located throughout the Western Hemisphere. What is the probability of a cash flow less than $150,000 in Year 1? In Year 5? What are the means and standard..
|
Net Asset Value (NAV) of a mutual fund is calculated every day. The book suggests that a closed-end fund (a fund that has a fixed number of shares) can trade above or below the NAV. As an example, someone could invest in Exchange Traded Funds (ETF) o..
|
What is the present value of $1,200 received at the end of each year for eight years starting in year 4 and ending in year 11 if the discount rate is 10 percent per year? Venture capitalist are like bankers in that they are organized as formal busine..
|
Quebec, Inc., is purchasing machinery at a cost of $4,310,720. The company’s management expects the machinery to produce cash flows of $892,410, $1,094,160, and $1,927,150 over the next three years, respectively. What is the payback period?
|