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1. Deployment Specialists pays a current (annual) dividend of $1.00 and is expected to grow at 20% for 2 years and then at 4% thereafter. If the required return for Deployment Specialists is 8.5%, what is the intrinsic value of Deployment Specialists stock? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Intrinsic value ................... $
2. Based on the work of Adam Smith, economic theory indicates that the pursuit of self-interest and profit maximization leads to the most efficient allocation and use of resources. is this true?
Fielder Company obtained land by issuing 2,970 shares of its $10 par value common stock. The land was recently appraised at $123,140. The common stock is actively traded at $40 per share. Prepare the journal entry to record the acquisition of the lan..
Suppose the 1-year futures price on a stock-index portfolio is 1,624, the stock index currently is. Formulate a zero-net-investment arbitrage portfolio and show that you can lock in riskless profits equal to the futures mispricing.
Compare the difference between retail and institutional cash flow to money market funds. How do they differ? Why do you think they differ?
Assume the following information. You have $900,000 to invest. Current spot rate of Australian dollar (A$) = $0.62. 180-day forward rate of the Australian dollar = $0.64. 180-day interest rate in the United States = 3.5%. 180-day interest rate in Aus..
Your portfolio is diversified. It has an expected return of 11% and a beta of 1.10. You want to add 200 shares of Tundra Corporation at $40 a share to your portfolio. Tundra has an expected return of 13.0% and a beta of 1.50. The total value of the i..
The Board of Directors of BesTaste, a medium size company, wants catering business that has been growing over the past six years. The local authority has permission to extend its current premises. The company granted the business assets. Explain whic..
If the fund manager buys traded European put options, how much would the insurance cost? - If the fund manager decides to provide insurance by using 9-month index futures, what should the initial position be?
Dudley Savings Bank wishes to take a position in Treasury bond futures contracts, which currently have a quote of 121 − 100. Dudley Savings thinks interest rates will go down over the period of investment. hould the bank go long or short on the futur..
Casper's is analyzing a proposed expansion project that is much riskier than the firm's current operations. Thus, the project will be assigned a discount rate equal to the firm's cost of capital plus 2.5 percent. The proposed project has an initial c..
Photochronograph Corporation (PC) manufactures time series photographic equipment. It is currently at its target debt−equity ratio of 0.80. It’s considering building a new $42 million manufacturing facility. This new plant is expected to generate aft..
On the day preceding the day quoted below, IBM's stock closed at $93.39 and Merck's stock closed at $44.21. Using this information, fill in the missing values below.
Assume that the average firm in your company's industry is expected to grow at a constant rate of 5% and that its dividend yield is 7%. Your company is about as risky as the average firm in the industry, but it has just successfully completed some R&..
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