Calculate the nominal annual rate convertible monthly

Assignment Help Finance Basics
Reference no: EM133074278

You oversee controlling debt payments in your company. You notice that there are three payments due: one of $18 million in month No. 4, another of $39 million in month No. 10, and the last of $40 million in month No. 15. At the same time, he notes that there is a cash surplus of $20 million tied up. He proposes to his manager that they renegotiate the debt, paying all the cash surplus in two more months, and the rest in four installments in months N°4, N°6, N°8 and N°10, which should increase by 10% each time.

The market interest rate is 14.5% effective. The frequency to be used will be monthly.

Calculate the nominal annual rate convertible monthly, and the value of each of the four payments. Use a focal date in month N°15.

Reference no: EM133074278

Questions Cloud

What is the 6-year extended npv of the project : What is the 6-year extended NPV of the project that creates the most value?
Industry Trend Analysis Assignment : Industry Trend Analysis Assignment - Analyses a business context and its influence on management decision and organisations business context and markets
What is the npv of project : Dog Up! Franks is looking at a new sausage system with an installed cost of $515,000. This cost will be depreciated straight-line to zero over the project's fiv
Calculate the profit or loss on the machine : During the year to 30 September 2003, Jim added an extension to the buildings at a cost of $6,800. Calculate the profit or loss on the machine
Calculate the nominal annual rate convertible monthly : Calculate the nominal annual rate convertible monthly, and the value of each of the four payments. Use a focal date in month N°15.
Compute the expected return and standard deviation : You consider investing in two stocks, A and B. The expected return on stock A is 11% and the standard deviation is 16%. The expected return on stock B is 17% an
Roles of sympathetic and parasympathetic nervous system : What are the roles of the sympathetic and parasympathetic nervous system? When are they active, and what physiological changes occur?
Estimate of the fair value of the stock : Sofia Garcia is a buy-side analyst for a large pension fund. She frequently uses dividend discount models such as the Gordon growth model for the consumer noncy
Characteristics of sustainable finance : What are the characteristics of sustainable finance and use of technology in the business environment?

Reviews

Write a Review

Finance Basics Questions & Answers

  Incorporated risk management into strategic plan

Based upon your professional experience or a recent event, provide an example of how an organization successfully or unsuccessfully

  Determine the stock price 5 years ago

Dividend growth has been a consistent 7% per year. If Investors want a 12% return, determine the stock price 5 years ago.

  Percentage increase in the price of bond

Consider a 30-year bond paying 12.5% coupons per annum, payable semi-annually and which has a face value of $200.

  Sourced to a foreign supplier

How do you decide what products should be sourced to a foreign supplier? What measures do you take to ensure the supplier is qualified?

  What is the effectiveness of local partner relationships

What is the role of non-governmental organizations (NGOs) in developing a country's entrepreneurship? (You may need to so some additional research for this question.)

  Which tasks would they delegate and to whom

The line manager is responsible for a new recruit's induction, but they would not be expected to cover all the elements as part of their job role.

  Question on standard deviation

Investment A has an expected return of 14 percent with a standard deviation of 4 percent, while investment B has an expected return of 20% with a standard deviation of 9 percent.

  What is the expected value of the firm equity

What is the expected value of the firm's equity if the low volatility project is undertaken?

  Find the conversion value of the preferred stock

a. Find the conversion value of the preferred stock? b. Find the convertible's premium over the conversion value?

  Estimation of target stock value

Target's EPS is $3.5. What is an estimation of Target's stock value using the data of Walmart?

  What is the required amount of payment

If he can earn 6% interest annually, what is the required amount of each payment?

  Calculate the european put option price

First, calculate the European put option price in a spreadsheet. Then use Derivagem to price it. Confirm these 2 prices match. Include the Derivagem output (screenshot or copy paste). Hint: The put pricing exercise in class was a 2-step tree. You can..

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