1 you hold 10000 eib7 14022015interest rates are flat at 6

Assignment Help Corporate Finance

Reference no: EM13381131

1. You hold $10,000 EIB7% 14.02.2015.Interest rates are flat at 6%. Calculate the price of the bond.

2. Cupid Plc has a return on assets of 20% and distributes 40% of earnings as a dividend. At what rate can it grow without requiring any additional external funding?

3. You purchase £100,000 UK Treasury 5% 14.02.2016 at 98.125%.

A) What is your direct yield?

B) What is the yield to maturity?

C) What assumptions are implicit in the calculation of the yield to maturity?

4. Valentine Plc's required rate of return is 16%. The shares are paying a dividend of $2.00 per share. What is the theoretical share price...

A) With no growth?

B) With growth expected for the future at 5% p.a.?

5. You are considering applying to study for an MBA at a prestigious university in Switzerland. The program will cost you $25,000 in tuition fees and you estimate that you need about $20,000 to fund your living in Switzerland for the year that the course takes. You will also forego your current salary of $50,000 for the year that you are studying. You can borrow all this money at 7% and estimate that you will be able to earn extra $25,000 p.a. when you have graduated.

A) Describe the relevant cash flows if you wish to value the MBA that you plan to take.

B) When do you foresee the payback of your investment?

C) If you believe that you can work for at least 10 years with the same salary premium, what is the value of your investment in today's money?

D) What other factors may influence your decision to take the program?

6. What is the theoretical value of any investment?

7. If a project has a life of 7 years and a payback of 7 years, what can you say about its Net Present Value?

8. You have $1 million to invest and have the following projects to choose from. Which do you invest in if your cost of borrowing is 12%? What other factors may affect your decision?

Project/Time	A	B	C	D
0	-200,000	-500,000	-500,000	-300,000
1	-100,000	0	+200,000	+100,000
2	+100,000	+1,000,000	+300,000	+100,000
3	+500,000	0	+300,000	+100,000
4	+200,000	+200,000	+200,000	+100,000

Reference no: EM13381131

Questions Cloud

Firm a has 10000 in assets entirely financed with equity : firm a has 10000 in assets entirely financed with equity. firm b also has 10000 in assets but these assets are financed

The assessment for this module is by means of an assignment : the assessment for this module is by means of an assignment and this assignment accounts for 100 of the overall mark

Do individual research on walmarts strategy in china who : do individual research on walmarts strategy in china. who has the better strategy for china walmart or carrefour? do a

Mega company has just signed a contract to export a machine : mega company has just signed a contract to export a machine to bestway enterprises an american corporation. the machine

1 you hold 10000 eib7 14022015interest rates are flat at 6 : 1. you hold 10000 eib7 14.02.2015.interest rates are flat at 6. calculate the price of the bond.2. cupid plc has a

Jetblue airways ipo valuation questions1 what are the : jetblue airways ipo valuation questions1. what are the advantages and disadvantages of going public?2. what different

Using theoretical and empirical evidence and relevant : using theoretical and empirical evidence and relevant examples critically discuss how the following factors would

Cash budget graded practice problemthe owner of lazy inn : cash budget graded practice problemthe owner of lazy inn has been requested by first national bank to submit a cash

Part 1 health plans may pay a physician a per member per : part 1 health plans may pay a physician a per member per month pmpm capitation payment for each person he or she is

User Account

All Pages