Determining the investment currently worth

Assignment Help Finance Basics
Reference no: EM131222320

1)A certain investment will pay $10,000 in 20 years. If the annual return on comparable investments is 8%, what is this investment currently worth? Show your work.

2)You take out a 5-year car loan for $20,000. The loan has a 5% annual interest rate. The payments are made monthly. What are the monthly payments? Show your work.

3)A bond has 5 years to maturity and has a YTM of 8%. Its par value is $1,000. Its semiannual coupons are $50. What is the bond's current market price? Show your work.

4)A bond currently sells for $1,000 and has a par of $1,000. It was issued two years ago and had a maturity of 10 years. The coupon rate is 7% and the interest payments are made semiannually. What is its YTM? Show your work.

5)A stock has just paid a dividend and will pay a dividend of $3.00 in a year. The dividend will stay constant for the rest of time. The return on equity for similar stocks is 14%. What is P0? Show your work.

6)A stock has just paid a dividend and declared an annual dividend of $12.00 to be paid one year from today. The dividend is expected to grow at a 7% annual rate. The return on equity for similar stocks is 12%. What is P0? Show your work.

7)(Essay) The DuPont Identity expresses the firm's ROE in terms of? Explain in details.

Reference no: EM131222320

Questions Cloud

Which key on the keyboard has been depressed : How do we detect which mouse button has been depressed? Which key on the keyboard has been depressed? The location of the mouse when a mouse button is depressed?
Required rate of return for blt : The planned dividends are $0.50 in one year's time, $0.60 in two years' time, and thereafter dividends will increase by a constant rate of 4% p.a. indefinitely. If the required rate of return for BLT is 12%, what is a fair price for one share toda..
Determining the forward exchange rate : Suppose the one year forward exchange rate is $1.25 USD/EUR and that you enter into a forward contract to sell the euros you receive at this rate. In the ?gure from part (a),
Example of a company or industry : Give an example of a company or industry that might use each system and explain why they use it. Format your submission consistent with APA guidelines.
Determining the investment currently worth : 1)A certain investment will pay $10,000 in 20 years. If the annual return on comparable investments is 8%, what is this investment currently worth? Show your work.
What apr rate should you charge your customers : To offset your overhead, you want to charge your customers an EAR (or EFF%) that is 2% more than the bank is charging you. -  What APR rate should you charge your customers?
Important operational and financial risks in arrangement : (1) What are the most important operational and financial risks in this arrangement? (2) How can the company pay its Canadian employees, who presumably want Canadian dollars, when its U.S. customers are paying in U.S. dollars?
What http header is needed in each case : Is it possible to dynamically generate JavaScript or CSS files for webpages? If so, how would you code a myjs.php or a mycss.php file? What HTTP header is needed in each case?
What apr rate should you charge your customers : To offset your overhead, you want to charge your customers an EAR (or EFF%) that is 2% more than the bank is charging you. - What APR rate should you charge your customers?

Reviews

Write a Review

Finance Basics Questions & Answers

  Prepare a country risk assessment for your chosen country

You should prepare a Country Risk assessment for your chosen country. Your Report must begin with an Executive Summary that recommends either entry or non-entry to a country.

  Estimate the capm required rate of return

Once you estimate the CAPM required rate of return denoted as E(Re) following the steps above, you can use this return (also known as cost of equity, ke) in the valuation model

  Deduce formula for weights of stocks

Deduce formula for weights of stocks A also B at which variance of portfolio P is minimal.

  Determine the preferred stock price

What is the preferred stock price if the required rate of return is 11% and what could be the maximum payment to the preferred stockholders on a per share basis?

  What is the company cost of debt

The company's tax rate is 30 %. a) what is the company's cost of debt? b) what is the company's cost of equity? c) what is the company's wacc?

  Assume that the united states invests heavily in government

The U.S. income level increased substantially, while Country K's income level has remained unchanged. The United States is expected to impose a small tariff on goods imported from Country K. Combine all expected impacts to develop an overall forecast..

  Importance of an effective risk management

which is almost double compared to the recommended 8% from BASEL ΙΙ. The CAR of the listed banks range from 14% to 19% and 8 out of 10 listed banks have total capital ratio in excess of 17%

  What is the maturity risk premium for the 2 year security

he real risk-free rate is 3 percent, and inflation is expected to be 3 percent for the next 2 years. A 2-year Treasury security yields 6.2 percent. What is the maturity risk premium for the 2-year security?

  Dealership finance company

If you purchase from your dealership's finance company, the APR will be 10% with your 10% down and monthly payments over three years. However, the dealership will give you a rebate of 5% of the car price after the three year term is complete.  You..

  Cash flow payback

Cash flow payback

  Computing the interest rates in given case

Find out the interest rate for Warren when $2,500 is returned one year later. Find out the rate if $2,500 will be returned in five years?

  Faro technologies whose products include portable 3d

faro technologies whose products include portable 3d measurement equipment has 400 million shares outstanding trading

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