Reference no: EM13937386
As you will learn from your reading, there are basically only two sources of external funding available to a corporation: equity and debt. Choose one of the following topics and present your analysis, which may include your personal opinions:
Suppose you decide to invest in corporate bonds. Accordingly, you visit a bond store. You see 3 bonds on the shelf. One is priced at $1,015.53, another is priced to sell at $1,300.00, and a third is selling at a discounted amount of $876.06. All have a $1,000.00 face value, and carry equal risk. From your reading, and from class lecture, you know that you will be earning the same rate on your investment, regardless of which bond(s) you purchase. But you have a friend with you, who doesn't understand how you can possibly earn the same interest rate, due to the difference in purchase price. How will you explain this concept to him or her?
Using the Internet, the City U library, or any other source, research the meaning and history of "par value" as it pertains to common stock. Is this term still relevant to stockholders' equity today, or is it merely an anachronism, an unnecessary carryover from the past, much like an old TV antenna we're too lazy to remove from the roof of our house?
|
Concerning a corporations optimal capital structure
: Which of the following statements is most correct concerning a corporation's optimal capital structure?
|
|
Risk increases as the term of the loan decreases
: The annual interest rate divided by the number of days in a year is the periodic rate. Fixed -rate loan portfolios expose lenders to higher interest-rate risk. In general, risk increases as the term of the loan decreases. Loans charged to loss repres..
|
|
Financial ratio is one financial value-measurement expressed
: A ratio is one value expressed to another. A financial ratio is one financial value or measurement expressed to another. There are about 20 financial ratios commonly used to assess one company's performance compared to another company in the same ind..
|
|
Determining the monetary advantage of investment opportunity
: There are several accepted methods of determining the monetary advantage of one investment opportunity over another: The payback method; zero discount rate; net present value; internal rate of return; modified internal rate of return; etc. Discuss on..
|
|
Decide to invest in corporate bonds
: Suppose you decide to invest in corporate bonds. Accordingly, you visit a bond store. You see 3 bonds on the shelf. One is priced at $1,015.53, another is priced to sell at $1,300.00, and a third is selling at a discounted amount of $876.06.
|
|
Portfolio equally invested in risk-free asset and two stock
: You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.12 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio?
|
|
Estimated market value of the promised payment at maturity
: A “century” bond has a 6 percent coupon rate and makes semiannual payments ($30 every six months). The yield to maturity is 4 percent and the maturity date is December 11, 2115. You should assume that today is December 11, 2015. What is the estimated..
|
|
What is the projects IRR
: Project k costs $56,312.34, it's expected cash inflows are $12,000 per year for 10 years, and it's WACC is 13%. What is the project's IRR? Round your answer to two decimal places.
|
|
What is the payback period for this project
: McGilla Golf has decided to sell a new line of golf clubs. The length of this project is seven years. The company has spent $1378859 on research and development for the new clubs. What is the payback period for this project?
|