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Questions -
Q1. A stock is expected to pay a dividend of $1 per share in two months and in five months. The stock price is $56, and the risk-free rate (with continuous compounding) is 8% for all maturities. An investor has just taken a long position in a seven-month forward contract on the stock.
What are the forward price and the initial value of the forward contract?
Three months later, the price of the stock is $60 and the risk-free rate is still 8%. What are the forward price and the value of the forward contract?
Q2. A stock is expected to pay a dividend of $1 per share in two months and in five months. The stock price is $56, and the risk-free rate (with continuous compounding) is 8% for all maturities. An investor has just taken a short position in a seven-month forward contract on the stock.
Three months later, the price of the stock is $50 and the risk-free rate is still 8%. What are the forward price and the value of the forward contract?
prepare a 1950- to 2500-word paper with the following components of a financial prospectus for your venture. the
During the year, the firm issued $20,000 in net new equity and paid off $23,800 in long-term debt. What is the amount of the cash flow from assets?
The draft report graded based on completeness and accuracy
What is your new estimate of the maximum share price for the purchase? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g).
A credit card had an APR of 15.21% all of last year and compounded interest daily. What was the credit card's effective interest rate last year?
Adley & Isaac General Hospital is thinking about purchasing a new machine. The new machine would cost $200,000 with an additional $25,000 for installation.
a) Will the bonds be selling at a premium or a discount with respect to their $1,000 face value? Why? b) What is the fair price of the bonds?
An alternate approach to discounted cashflow valuation is the adjusted present value approach, where you value the firm with no debt (unlevered firm)
If growth is then expected to level off at 8 percent, and if you require a 14 percent rate of return, how much should you be willing to pay for this stock?
Trevor Price bought 10-year bonds issued by Harvest Foods five years ago for $950.97. The bonds make semiannual coupon payments at a rate of 8.4 percent. If the current price of the bonds is $1,072.73, what is the yield that Trevor would earn by s..
A 2.60 percent coupon municipal bond has 10 years left to maturity and has a price quote of 95.25. The bond can be called in four years.
If you invest in CDs earning an interest rate of 9 percent, the interest is taxable in the 28 percent bracket, and inflation is 5 percent, Determine real rate of interest you receive after tax?
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