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Mr. Franklin is 70 years of age, is in excellent health, pursues a simple but active lifestyle, and has no children. He has interest in a private company for $90 million and has decided that a medical research foundation will receive half the proceeds now and will be the primary beneficiary of his estate upon his death. Mr. Franklin is committed to the foundation's well-being because he believes strongly that, through it, a cure will be found for the disease that killed his wife. He now realizes that an appropriate investment policy and asset allocations are required if his goals are to be met through investment of his considerable assets. Currently, the following assets are available for use in building an appropriate portfolio for him: $45.0 million cash (from sale of the private company interest, net of a $45 million gift to the foundation) $10.0 million stocks and bonds ($5 million each) $ 9.0 million warehouse property (now fully leased) $ 1.0 million value of his residence $65.0 million total available assets a. Formulate and justify an investment policy statement setting forth the appropriate guidelines within which future investment actions should take place. Your policy statement should encompass all relevant objective and constraint considerations. b. Recommend and justify a long-term asset allocation that is consistent with the investment policy statement you created in Part a. Briefly explain the key assumptions you made in generating your allocation.
Percival Hygiene has $10 million invested in long-term company bonds. This bond portfolio's expected annual rate of return is 9%, and the annual standard deviation is 10%.
Computing the present value of this investment and what is the present value of this investment
A 4.7 percent corporate coupon bond is callable in ten years for a call premium of one year of coupon payments. Assuming a par value of $1,000, what is the price paid to the bondholder if the issuer calls the bond?
An investor enters into a short forward contract to sell 100,000 British pounds for US dollars at an exchange rate of 1.4000 US dollars per pound. How much does the investor gain or lose if the exchange rate at the end of the contract is.
Use the CF function and solve for NPV to get the answer. Just enter the number up to 2 decimal points. Do not enter $ in the answer box.
A stock is expected to pay $0.80 per share every year indefinitely. If the current price of the stock is $18.90, and the equity cost of capital for the company that released the shares is 6.4%, what price would an investor be expected to pay per s..
What tools or techniques would you use in examine business strategies, financial reporting & disclosure policies, financial performance, forecasts & fundamental values?
Stock currently sells for 35.02 per share, market required rate of return is 17 percent, the beta is 0.10, ant risk free rate of return is 3.3 percent.
How should the capital structure weights used to calculate the WACC be determined? Explain.
Assume that management believes probability of weak demand in 2012 is 25 percent and the probability of strong demand is 75%.
You wants to sell short 100 shares of XYZ Company stock. If the last two transactions were at 34.10 followed by 34.15, you only can sell short on the next transaction at a value of;
Calculation of intrinsic value of bond with given data and what is the intrinsic value (to the nearest dollar) of an SWH Corporation bond
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