Reference no: EM1314843
Computation of value of bond
1. The Chestnut Company has a level-coupon bond outstanding (face value = $1,000) that pays $120 per year and has 10 years to maturity. If the yield for similar bonds is currently 14%, what is the bond's value?
2. You earned a total return of 8% on Stock A this year, earned 7% last year, and earned 15% two years ago. Calculate both the three-year holding period return and the average three year return.
3. Calculate the expected return on the stock of Mitro Corporation. The beta is estimated to be 1.4, the market risk premium is 9% and the risk-free rate is 4%.
4. A portfolio exists containing stocks A, B, and C held in proportions 50%, 30%, and 20% respectively. The expected returns on the three stocks are given by 10%, 15%, and 16% respectively. Calculate the portfolio's expected return.
5. A project has a cost of $180. It will have a life of 3 years. The cost will be depreciated straight-line to a zero salvage value, and will be worth $40 at that time. Cash sales will be $200 per year and cash costs will run $110 per year. The firm will also need to invest $70 in net working capital at year 0. The appropriate discount rate is 8% (use for all flows), and the corporate tax rate is 40%. What are the cash flows in years 1, 2, and 3?
6. Conlin Containers announces that on June 1, 1998, it will pay a dividend of $3.00 per share on July 15 to all holders on record as of June 30. The firm's stock price is currently at $50 per share. Assume that all investors are in the 28% tax bracket. Given that the ex-dividend date is June 26, what should happen to Conlin's stock price on June 26?
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Simple random sampling technique
: When the names of all the students at Omega University were dropped to a fishbowl, they would include:
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Compare the performance of the evenly weighted portfolio
: Compare the performance of the evenly weighted portfolio with each of the individual stock by comparing the alphas also the Sharpe Ratios.
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Working capital management
: The question is regarding working capital management involving computation of inventory needed and How much inventory can ABC purchase without violating its debt agreement if their total current assets equal $20 million?
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Equivalent annual cost of one of these machines
: The machines have a 6-yr life after which they are worthless. Illustrate what is the equivalent annual cost of one of these machines if the required return is 16 percent.
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Computation of value of bond
: Computation of value of bond and Ccalculate the expected return on the stock of Mitro Corporation
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Risk is a major concern of almost all investors
: Risk is a major concern of almost all investors. When shareholders invest their money in a firm, they expect managers to take risks with those funds.
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Commercial paper financing
: Evaluate a company's annual financing cost of this commercial paper financing
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Find the original cost
: Find the original cost.
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Draw a vector diagram
: A space station, in the form of a wheel 133 m in diameter, rotates to provide an "artificial gravity" of 2.20 m/s2 for persons who walk around on the inner wall of the outer rim. Find the rate of the wheel's rotation in revolutions per minute that wi..
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