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If the interest rate this year is 8.6% and the interest rate next year will be 10.6%, what is the future value of $1 after 2 years? What is the present value of a payment of $1 to be received in 2 years?
Springfield nuclear energy inc. bonds are currently trading at $1,687.37. The bonds have a face value of $1,000, a coupon rate of 11% with coupons paid annually, and they matu
Firms A and B have entered into an interest rate swap. On the first payment date, Firm A owes Firm B 12 percent of $10 million, and Firm B owes Firm A 14 percent of $10 millio
Wee beastie animal farm bonds have 7 years to maturity and pay an annual coupon at the rate of 6.4%. The face value of the bonds is $1,000. The price of the bonds is $1,095.73
(Fisher model) The pure rate of interest is 3% and investor demand an inflation premium of 4%. What interest rate should they demand if they require a risk premium of 5%?
What is the sustainable growth rate for each year? Based on your analysis of the sustainable growth rate between 2011 and 2015, what are your recommendations for the firm?
Suppose Baa-rated bonds currently yield 7.5%, while Aa-rated bonds yield 5.5%. Now suppose that due to an increase in the expected inflation rate, the yields on both bonds inc
Calculate the WACC under the following assumptions: long-term bonds offer a yield of 8%, stock price is $50 per share, dividend is $2/share, dividend expected to grow at a con
ABC firm has a debt to equity ratio of 2.3 (that they wish to maintain) and new investments would cost $35 million this year. The firm expects earnings of $12 million this yea
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