Lintron Inc issued corporate bonds to finance the purchase of a new plasma die cutting machine. The bonds are currently selling for $1035.50 and have 8 years remaining until maturity. The market interest rate is 5.4% annually. Calculate the semi-annu..
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With an interest rate of 12%, which is the more attractive investment, given that they are equally risky? Investment A: An ordinary annuity of $5,000 for 5 years, followed by a two---year annuity of ---$2,000; Investment B: An annuity due of $5,000..
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Mrs. Landis has a 2-stock portfolio with a total value of $520,000. $175,000 is invested in Stock A with a beta of 1.25 and the remainder is invested in Stock B with a beta of 1.25. What is her portfolio's beta?
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An investment has an installed cost of $566,382. The cash flows over the four-year life of the investment are projected to be $195,584, $239,318, $187,674, and $155,313. Requirement 1: If the discount rate is zero, what is the NPV? At what discount r..
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On Jan 10th 2000, AOL announced to acquire Time Warner for $182 billion. When the deal was announced, the combined company is worth $350 billion. Now split again, AOL is worth $3 billion while Time Warner is worth about $140 billion 15 years later. P..
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Your portfolio allocates equal funds to the DW Co. and Woodpecker, Inc. DW Co. stock has an annual return mean and standard deviation of 11 percent and 34 percent, respectively. Woodpecker, Inc., stock has an annual return mean and standard deviation..
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Calculating the Rate of Return of Investment Using Financial Leverage. Suppose Shaan invested just $10,000 of his own money and had a $90,000 mortgage with an interest rate of 8.5 percent. If after three years he sold the property for $120,000. What ..
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Your new born child will be starting college in 18 years. You expect your child's college education to cost $34,020 per year, due at the beginning of each year. How much must you set aside at the end of each year for your child to attend four years o..
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“The economic, social, and environmental costs of globalization have altered business practices.”
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You want to borrow $87,000 from your local bank to buy a new sailboat. You can afford to make monthly payments of $1,550, but no more. Assuming monthly compounding, what is the highest rate you can afford on a 72-month APR loan?
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Suppose you are the CEO of a Japanese company that produces computers and exports them to the US. The price for a computer is always $700, and the dollar-yen forward with maturity at the end of next year is traded at ¥108/$. Quantify the overall fore..
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AJ owns a portfolio that has a value of $300,000 and consists of only 3 stocks. He has $60,000 worth of stock A, which has a beta of 1.25; he has 8,000 shares of stock B, which has a share price of $22.50 and a beta of -0.05; and he has some stock C,..
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