What are the total return and the capital gains

Assignment Help Finance Basics
Reference no: EM131299058

Assume that you are nearing graduation and have applied for a job with a local bank. The bank's evaluation process requires you to take an examination that covers several financial analysis techniques. Use the following information for Questions 1 through 2:

1. What is the present value of the following uneven cash flow stream -$50, $100, $75, and $50 at the end of Years 0 through 3? The appropriate interest rate is 10%, compounded annually.

2. Suppose that on January 1 you deposit $100 in an account that pays a nominal (or quoted) interest rate of 11.33463%, with interest added (compounded) daily. How much will you have in your account on October 1, or 9 months later?

Use the following information for Questions 3 and 4:

A firm issues a 10-year, $1,000 par value bond with a 10% annual coupon and a required rate of return is 10%.

3. What is the yield to maturity on a 10-year, 9% annual coupon, $1,000 par value bond that sells for $887.00? That sells for $1,134.20? What does a bond selling at a discount or at a premium tell you about the relationship between rd and the bond's coupon rate?

4. What are the total return, the current yield, and the capital gains yield for the discount bond in Question #3 at $887.00? At $1,134.20? (Assume the bond is held to maturity and the company does not default on the bond.)

Reference no: EM131299058

Questions Cloud

Marketing approach to customer targeted marketing : How does a company strategically change from a traditional marketing approach to customer targeted marketing?
Factor input referred contribution of flicker noise fall : Suppose the helper in Figure reduces the bias current of the switching pair by a factor of 2. By what factor does the input-referred contribution of the flicker noise fall?
Develop a revised strategy : Write a 6- to 7-page paper, not including cover and reference pages, in which you use the results from SLP2 and CVP analysis to develop a revised strategy -  you must provide clear and logical support for your proposed strategy using financial anal..
Find the shape center and spread of this distribution : 85-year-olds and older. Figure 11.5 is a histogram of the percentages of residents aged 85 and older in the 50 states in 2006. Describe the shape, center, and spread of this distribution. Are there any outliers?
What are the total return and the capital gains : What are the total return, the current yield, and the capital gains yield for the discount bond in Question #3 at $887.00? At $1,134.20? (Assume the bond is held to maturity and the company does not default on the bond.)
Negative associations with success : 1. Should the executive board have fired Tim for failing to live up to the expectations? What alternatives are there? 2. What could the board have done to help Tim address these disruptive behaviors? 3. What areas should be explored with Tim in tryin..
Reflecting upon the idea of functionalism : In reflecting upon the idea of functionalism and its relationship to social stability in society, do you agree with concept of the model? In your discussion, specifically address the idea that because society's needs and individual's needs are sim..
Describe the shape center and spread of this distribution : Minority students in engineering. Figure 11.11 is a histogram of the number of minority students (black, Hispanic, Native American) who earned doctorate degrees in engineering from each of 152 universities in the years 2000 through 2002.
Measures of univariate variable description : Explain the measures of univariate variable description that we have (i.e., frequency, central tendency, and dispersion). What do these measures tell us? Why are they useful?

Reviews

Write a Review

Finance Basics Questions & Answers

  Which organization forms give their owners limited liability

You are a shareholder in a C corporation. The corporation earns $2 per share before taxes. Once it has paid taxes it will distribute the rest of its earnings to you as a dividend. The corporate tax rate is 40% and the personal tax rate on (both divid..

  How health care organizations interpret corporate cost

Discuss how health care organizations interpret the corporate cost of capital and how that interpretation would be applied to capital investment decisions. explain your rationale.

  Difference between moral hazard and morale hazard why moral

difference between moral hazard and morale hazard why moral hazard is important concept to insurance

  What are cash receipts in march

if excel inc. has projected sales of $30,000 in january, $20,000 in february, and $20,000 in march 80% of sales are on credit 20% are collected in the month of sale and 80% are collected the month after, what are cash receipts in march?

  What is financial break-even point for the project

Do you think that the project is a feasible investment? Why or why not?

  Types of personal insurance

Evaluate the following types of personal insurance:

  Compute depreciation charge

Pemberton Corporation bought a machine costing $300,000 that had an estimate useful life of 6-years and residual value of $18,000. The machine is expected to produce 3,525,000 units during its useful life;

  Explain how changes in debt-equity ratio impact the beta

How does the Law of Conservation of Value (presented in the text) contrast with the first and second Propositions by Modigliani and Miller?

  Which of the following is true of sunk costs

Which of the following is true of sunk costs?

  What are auditing procedures what are some basic objectives

what are auditing procedures? what are some basic objectives of a financial statement

  Segmented contribution income statements are as shown and

rockwell company owns a single restaurant which has a cantina primarily used to seat patrons while they wait on their

  What dollar return on the net proceeds of the offering

An offering of 699,029 shares will be sold at $15.45 to provide approximatey 10.8 million. What dollar return on the net proceeds of the offering must be earned to bring earnings per share up to 1.03?

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