“Excel helps with a large number of visual aids (colors, font sizes, number formats, frames and others) to enhance the force of expression of a financial model.” True or False. Explain.

## What is the optimal payout ratioSuppose a company has next year earnings of 100k, ROE 10%, and discount rate of 20%. What is the optimal payout ratio? What is the value destruction if the managers payout 50% of earnings? |

## Pricing one year loan with nonzero recoveryA borrower has a 5% chance of default on a $100 loan; If default occurs, the bank gets $60 back in principal and no interest; The bank sets the rate on the loan expecting 6% (3% inflation + 3% real) What is the interest rate the bank charges this bor.. |

## How much would an investor pay for the the bondWhat are some of the dangers and incentive problems of the financial sector getting too big and commonwealth Bank issues bonds on the capital market to raise financing for its loans. |

## What is the importance of optimal capital structureWhat is the importance of optimal capital structure? Should a company base its optimal capital structure on the book value, market values or target values? What is recommended for Nike's optimal capital structure and why? |

## What is the value of a share of common stock todaywhat is the value of a share of common stock today? |

## Construct and use a trial balanceConstruct and use a trial balance.- The accounts of Lake Oaks Pool Service, Inc., follow with their normal balances at April 30, 2014. |

## A ten-year zero coupon bond with face valueA ten-year zero coupon bond with a face value of $1,000 is currently priced at 48.72% of the face value. Assume the bond's YTM remains unchanged throughout the bond's term to maturity. What should the bond be sold for three years from now? |

## Calculate the average rate of return for each yearCaswell Enterprises had the following end-of-year stock prices over the last five years and paid no dividends. Calculate the average rate of return for each year from the above information. What is the arithmetic average rate of return earned by inve.. |

## Yield to maturity-duration of this bondA bond currently sells for $1,000, which gives it a yield to maturity of 5%. Suppose that if the yield increases by 20 basis points, the price of the bond falls to $975. What is the duration of this bond? |

## The two stocks in your portfolioThe two stocks in your portfolio, X and Y, have independent returns, so the correlation between them, rXY is zero. |

## Debt aspirations with your debt realityWhat specific behavioral steps do you personally need to take to match your debt aspirations with your debt reality? |

## What are the market risk premiumGiven the mean return for the S&P 500 index from 2006-2015 is 9%, and the risk-free rate is 1.0, what are the following-Market Risk Premium for the S&P 500 |

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