Present and future values and security valuation

Assignment Help Financial Management
Reference no: EM13813447

We examined two important topics in finance this week: (a) present and future values and (b) security valuation.

Critically reflect on the importance of present and future values. What factors must be considered when calculating present and future values? What other qualitative factors play into present and future value decisions? Perhaps you have opportunities in your professional life to use present and future values. What are some real or potential applications of these concepts?

We also looked at expected returns. Why do bond values go down when interest rates go up? Is this true in the opposite direction?

Reference no: EM13813447

Questions Cloud

Present value-assume the appropriate discount rate : An investment will pay you $75,000 in nine years. Assume the appropriate discount rate is 6 percent compounded daily. What is the present value?
What will your monthly payment be : You want to buy a new sports car from Muscle Motors for $52,500. The contract is in the form of a 60-month annuity due at an APR of 6.25 percent. What will your monthly payment be?
How important is it to adhere to these standards : How important is it to adhere to these standards? Is there any point in time in which you can loosely interpret or manipulate these standards? What is due professional care, and how does it refer to the GAAS?
How would you use this knowledge as a global leader : Discuss (worldwide), which countries were the largest recipient and source countries of FDI last year? Why? How would you use this knowledge as a global leader?
Present and future values and security valuation : We examined two important topics in finance this week: (a) present and future values and (b) security valuation. Critically reflect on the importance of present and future values. What factors must be considered when calculating present and future va..
What is the convexity of this instrument : What are the duration and modified duration of a seven-year, 3.5 percent coupon rate, annual coupon payment, $1000 par value government note priced today to yield 3 percent to maturity. What is the convexity of this instrument?
Holding period return to this investment : Over the past 10 years, your $15,000 in gold coins has increased value by 250 percent. You plan to sell these coins today. You have paid annual storage and insurance costs of $1520 per year. Assay expenses at the time of sales are expected to total $..
Credit card-what is the annual effective rate of interest : Your monthly statement from your bank credit card shows that the monthly rate of interest is 1.2%. What is the annual effective rate of interest you are being charged on your credit card if it's compounded annually?
Inventory and accounts receivable without violating terms : Sees Inc. has an agreement with it banks that allow Sees to borrow money on a short term basis to finance its inventories and accounts receivable. The agreement requires Sees to maintain a current ratio of 2.1 or higher and a debt ratio of 65% or low..

Reviews

Write a Review

Financial Management Questions & Answers

  Dr n mohamudally 1200 question 1 normal 0 false false

dr. n. mohamudally 12.00 question 1 normal 0 false false false en-in x-none x-none

  Law print the annual percentage rate

Master Card and other credit card issuers must by law print the Annual Percentage Rate (APR) on their monthly statements. If the APR is stated to be 13.92%, with interest paid monthly, what is the card's EFF%? State your answer as a percentage to 2 d..

  Central bank directly controls both inside and outside money

Central bank directly controls both inside and outside money. Outside money is that part of the money supply produced by the private banking system. Inside money refers to the quantity of notes and coin in the economy.

  Suppose that several prominent highly leveraged corporations

Assume that the bonds of highly leveraged ByHy Corporation currently have a yield to maturity of 8% and are due to mature in 1 year. Meanwhile, assume that 1 year Treasury securities are yielding 1%. Also assume that investors expect that there is a ..

  Project uses both equity and debt finance

Should a project or an ongoing business use debt or equity financing? What are the pros and cons of each? If a project uses both equity and debt finance, what is the appropriate mix? What types of financing are used by your current organization (or a..

  Tax consequences to allie and to broadbill corporation

Allie forms Broadbill Corporation by transferring land (basis of $125,000, fair market value of $775,000), which is subject to a mortgage of $375,000. One month prior to incorporating Broadbill, Allie borrows $100,000 for personal reasons and gives t..

  Result of depositing a fixed instalment amount

What factor would you use to determine the future lump sum amount that could be withdrawn from a bank as a result of depositing a fixed instalment amount for "n" years? State its name and show its standard notation.

  Subtract to achieve the target debt ratio

Pace Corporation's assets are $625,000, and its total debt outstanding is $185,000. The CFO wants to employ a debt-to-assets ratio of 55%. How much debt must the company add or subtract to achieve the target debt ratio?

  Do you think the yield curve will change during this time

How do you think the yield curve will change during this time? Offer some logic or current reference(s) to support your answers.

  Computer-based order entry system

Your firm is contemplating the purchase of a new $575,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $59,000 at the end of that time. You will save $265,000 before..

  What would be firms new receivables balance if recently

What would be firm''s new receivables balance if recently planned electronic claim system resulted in collecting from third-party-payers in 45 and 75 days, as a replacement for 60 and 90 days.

  What is the company''s eva and what does the eva represent

Smith's Shoe Shop had $4,000,000 in operating income last year, after-tax cost of capital of 7%, and a tax rate of 35%. The company has $14,000,000 in stockholder's equity, $17,000,000 in long-term bonds, and $1,500,000 in preferred stock.

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