Market value at risk of one of the events

Assignment Help Finance Basics
Reference no: EM131360708

The General Construction Company (GCC) is expecting next year a cash flow from asset of $50 million that is expected to grow forever at 3 percent. Its cost of capital is 11 percent. The firm is exposed to the following risk:

There is a 60 percent chance that its growth rate drops tp 1 percent.

What is the market value at risk of each one of the events listed above?

Reference no: EM131360708

Questions Cloud

How and why mishima movie get made : Watching the movie Mishima (Paul Schrader, 1985) and then write a paper.- how and why movies get made, can you enlighten me on what's going on in this movie?"
Cfo of cooking for friends : Finding the WACC. Monica is the CFO of Cooking for Friends (CFF) and uses the pecking order hypothesis philosophy when she raises capital for company projects. Currently, she can borrow up to $600,000 from her bank at a rate of 8.5%, float a bond ..
Why limited leverage is good for business : Explain why limited leverage is good for business.Show the profitability of the project so that Stephanie can convince her father to purchase the truck by borrowing money.
Explain the selected companys specific practices or policies : Examine the selected company's specific practices or policies. Speculate on the major influences that these practices or policies have on individual and organizational outcomes.
Market value at risk of one of the events : There is a 60 percent chance that its growth rate drops tp 1 percent. What is the market value at risk of each one of the events listed above?
What is a database management system : " Do You Know What It Takes to Design an HRIS Database Management System (DBMS)?: Please respond to the following:First, watch the following two (2) videos from the lynda.com course Relational Database Fundamentals with Adam Wilbert. Then, respond ..
Rank the projects using the profitability index : Rank the projects using the profitability index. Considering the limit on funds available, which projects should be accepted? Using the NPV, which projects should be accepted, considering the limit on funds available? If the available investment fund..
What are the circumstances surrounding the request : What are the circumstances surrounding the request? How do you think each audience will react to the message? What information will be especially important to each audience?
Discuss about the post given below : Read the Discussion Participation Scoring Guide to learn how the instructor will evaluate your discussion participation throughout this course.Outline the major aspects of an organizational theory of your choice within the parameters set forth be..

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the interest rate

Suppose you deposit $25,000 in a bank today, and the bank promises to pay you $50,000 at the end of ten years. What is the interest rate? Please show work.

  What is the maximum amount of bank borrowing that would

Use the income statement data and the balance sheet information from Problem 9 to prepare monthly income statements, balance sheets, and statements of cash flows for October through December 2011. What is the maximum amount of bank borrowing that wou..

  Given a chomsky normal form grammar g

a) Given a Chomsky normal form grammar G. show how to add productions for single insertion. deletion. and mutation errors to (he grammar so that the enlarged grammar generates all possible token strings.

  What is the difference between an asset purchase and a stock

What is the difference between an asset purchase and a stock purchase?

  Why is the investment appraisal process so important

Why is the investment appraisal process so important? The concept of relevance applicable to the determination of the project's cash flows stating all assumptions made. What are the criticisms of the methods used in the investment appraisal process

  Stock a has an expected return of 1245 and the portfolio

you formed a portfolio consisting of two stocks. you invested 28 of your funds in stock a and 72 of your funds in

  Impact of ratios

A company faces financial pressures from attempting to increase too rapidly. Which of the following ratios would you expect to be impacted the most by these pressures?

  Which organizational officer is directly responsible

Which organizational officer is directly responsible for managing a company's cash and funds invested in various marketable securities?

  What are the key events and dates in the dividend payment

what are the key events and dates in the dividend payment

  Analyzing the proposed project

This week the company is trying to decide if the machine could be better utilized if they assigned it a proposed project. When analyzing the proposed project, the $1,200 should be treated as which type of cost?

  Economic concern in a south american country

As an employee of the World Bank, you have been asked to research 1 economic concern in a South American country and write a report on your findings.

  Calculating break-even points

Three corporations were looking to start a new brewpub near Sacramento, California called Roseville Brewing Corporation.

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