Compound rates not discount rates

Assignment Help Financial Management
Reference no: EM13945242

Compound rates, not discount rates, are used in an attempt to:

A. screen out weak investments.

B. quantify the firm's opportunity costs.

C. quantify the firm's risk.

D. A and B.

E. none of the above.

Reference no: EM13945242

Questions Cloud

Replacement cost valuation is based : Replacement cost valuation is based on
Briefly explain how investors and analysts : Briefly explain how investors and analysts could use the information in note 1.
Present worth of machinery if market rate of interest widget : The Wildwood Widget Company needs a milling machine for its new assembly line. The machine presently costs $85,000, but has a cost inflation rate of 2%. Widget will not need to purchase the machine for 3 years. If the general inflation is expected to..
What thoughts about euthanasia, given what christ did for us : Many argue that assisted suicide or euthanasia is justified because it relieves a person from suffering. What are your thoughts about euthanasia, given what Christ did for us?
Compound rates not discount rates : Compound rates, not discount rates, are used in an attempt to:
Analyzing after-tax cost of debt for firm : You are analyzing the after-tax cost of debt for a firm. You know that the firm’s 12-year maturity, 9.10 percent semi-annual coupon bonds are selling at a price of $767.17. These bonds are the only debt outstanding for the firm. What is the current Y..
What exactly makes the argument misleading : Use the Internet to find an example of an argument that is misleading. A good place to start might be advertisements or political debate. Explain your position. What exactly makes the argument misleading
Expanding rapidly-what is the value of the stock today : Microtech Corporation is expanding rapidly, and it currently needs to retain all of its earnings, hence it does not pay any dividends, with the first dividend of $1.00 coming 3 years from today. The dividend should grow rapidly—at a rate of 50 percen..
Compute the net present value of the actual cash flows : Compute the net present value of the actual cash flows as of the beginning of the investment.

Reviews

Write a Review

 

Financial Management Questions & Answers

  Take the time to listen

A concise paraphrase will acknowledge that you've "gotten" the message. And when it's your turn to speak, know you've provided a model for how you hope your words will be received. Share your opinion of what this article says about listening and c..

  What is the maximum profit on the transaction

Consider a stock priced at $30 with a standard deviation of 0.3. The risk-free rate is 0.05. There are put and call options available at exercise prices of 30 and a time to expiration of six months. What is the maximum profit on the transaction descr..

  Minimum and maximum purchase prices for target company

Acquiring Company is considering buying target Company. Target Company is a small biotechnology firm that develops products licensed to the major pharmaceutical firms. Development costs are expected to generate negative cash flows during the first tw..

  What is the tax liability-corperate tax rates

Pearls Inc had sales in 2013 of 2.1 Million. The common stock holders recieved 600,000 in cash dividends. Interest totaling 150,000 was paid on outstanding debts. Operating expenses totaled 300,000, and COGS was 500,000. What is the tax liability of ..

  Calculate the terminal value assuming that cash flows

A project generates the following sequence of cash flows over six years. Calculate the NPV over the six years. The discount rate is 11%. Calculate the terminal value assuming that cash flows after the sixth year grow at 2% annually in perpetuity, and..

  Considered the firms optimal capital structure

Which of the following would be considered the firm's optimal capital structure?

  Notion that company can be both global and local represents

The notion that a company can be both global and local represents:

  Explain the nature of groups and group behavior

Explain the nature of groups and group behavior within organisations you identified and discuss factors that may promote or inhibit the development of effective teamwork in organisations you identified.

  Outstanding shares of binder corporation stock

Buddy owns 100 of the outstanding shares of Binder Corporation stock. Buddy's basis in his Binder Corporation stock is $100,000. Binder Corporation is merged with Clipper Corporation in a tax-free reorganization.  Buddy and Bruce each own 25% of Clip..

  Analysis of investment dear sir madamcan you please provide

dear sir madam ltbrgt ltbrgtcan you please provide me the attached solution plagiarism free. looking forward to hear

  Maintain constant growth rate in its dividends

Suppose you know that a company’s stock currently sells for $50 per share and the required return on the stock is 10 percent. You also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield. If it..

  Common stock with the expected dividends

Consider a common stock with the following expected dividends: $2 in one year (i.e., at t=1), $3 in two years (at t=2), $0 in three years (at t=3), $2 in four years (at t=4) and $5 in five years (at t=5).

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd