Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Illustration
Vishal Mehta & Co., Mumbai issued 7%, 5-year bond on 31st December 2006. The par value of a bond is Rs. 100. This bond pays interest annually and discount rate 6% should be used to calculate the present value of each cash flow. The bond is redeemed at par after five years. Find out the PV of the bond on 31st December 2006.
Solution
Calculation of PV of 7% Bond using Single Discounting Rate
Year
Cash Flow (in Rs.)
PV (in Rs.)
2007
7
6.60
2008
6.23
2009
5.88
2010
5.54
2011
107
79.96
Present Value =
104.21
Significance of cost of capital
Q. Forms of Bank Finance? A firm can draw funds from a bank within the maximum credit limit sanctioned. It can draw funds in the following forms: 1) Overdraft 2) Cash Cre
You know that Treasury bills have a beta of 0 because they are risk-free. A portfolio of technology stocks has a beta of 3. You plan to invest 40% of your investment capital in T
Previous MOS = 750 - 270 = 480 aircraft; Revised MOS = 750 - 420 = 330 aircraft Explanation that a lower MOS = lower levels of profit and therefore exposes the business to more
Define the term- Profitability maximisation Profitability maximisation would imply that a firm must be guided in financial decision making by one test; select projects, assets
To compute the total returns we need the investment horizon, reinvestment rate and the price of the bond at the end of the investment horizon. Steps involved in computi
Define depreciation expense as it appears on the income statement. How does depreciation affect cash flow? The term accounting depreciation is the allocation of an asset's init
Matching or Accrual The accrual concept makes a distinction among the receipt of cash and the right to receive it, and the payment of cash and legal obligation to pay it.
These are bonds which are offered within the euro market and several other markets simultaneously. Unlike Eurobonds, global bonds can be issued in the same curren
LP Problem, Financial Management Max Z = 107x1+x2+2x3 Subject to 14x1+x2-6x3+3x4=7 16x1+x2-6x3 3x1-x2-x3 x1,x2,x3,x4 >=0
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!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd