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Elliot’s bond currently sell for Kshs 11,500, have an 11% coupon interest rate and a Kshs 10,000 par value, pay interest annually, and have 18 years to maturity.
Required:
(i) Calculate the bond’s YTM (ii) Compare YTM in (i) above to bond’s current price and it’s par value to explain this difference
What is the payback for this investment ? The average accounting return method
?Present-value comparison?-You are offered ?$1,800 today, $9,000 in 9 years, or $34,000 in 28 years. Loan amortization?-How large must the annual payments? be?
How does the potential reward tie to the risk? How do you go about liquidating a stock that is privately held?
Calculate the value of the bond to you, given your required rate of return.
What will be its optimal upper cash limit? What is the optimal cash return point?
Assume semi-annual compounding, calculate the current yield for the bond.
What factors does a firm's management consider when making dividend policy decisions?
What is the interest rate (cost) of retained earnings? What is the interest rate (cost) of a new common stock issue?
You buy a new piece of equipment for $12, 539, and you receive a cash inflow of $2, What is the internal rate of return?
Javits & Sons' common stock currently trades at $27.00 a share. It is expected to pay an annual dividend of $3.00 a share at the end of the year (D1 = $3.00), and the constant growth rate is 6% a year. What is the company's cost of common equity if a..
Hanover Tech is currently an all equity firm that has 320,000 shares of stock outstanding with a market price of $19 a share. The current cost of equity is 15.4 percent and the tax rate is 36 percent. First get the value of the unlevered firm. Then c..
Your company evaluates proposals using a 2.5-year payback period. You have two alternatives for a new boring machine. Alt. A costs $10,000 and will last for six years. Alt.A will save $5,000 in year one and $2,000 in year two. What savings in year 3 ..
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