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CBS bond with a par value of $1,000, an interest rate of 7.625 percent, and a maturity of 10 years The bond is selling for $986.
Alabama Power Company preferred stock with a $50 par value and a dividend of $2.8125 per 61 year. The stock is currently trading at $39 per share.
Emerson Electric common stock that is selling for $80 with a par value of $5. This stock recently paid a $2.50 dividend, and the firm's earnings per share have increased from $2.40 to $4.48 in the past 5 years. An equivalent amount of growth in the dividend is expected.
Your required rates of return for these investments are 6 percent for the bond, 7 percent for the preferred stock, and 15 percent for the common stock. Using this information, answer the following questions:
a. Calculate the value of each investment based on your required rate of return.b. Which investment would you select? Why?c. Assume Emerson Electrics managers expect an earnings downturn and a resulting decreases in growth of 3 percent. How does this affect your answers to parts 1 and 2?d. What required rates of return would make you indifferent to all three options?
Journal entries to record issuance of stock, declaration of dividend and payment of dividend - Write journal entries to show the effect of issuance of common stock and preferred stock on January 1, 2008.
Compute the duration of this bond and use it to estimate the new value of the bond if rates were to suddenly decline by 0.80%. Calculate the bond's value directly (using the present value approach) assuming that rates declined 0.80% from the yield t..
Find out two publicly traded companies and compare and contrast them financially. This must include analysis, liquidity, asset management, financial leverage, profitability and market value. Describe your findings.
Swenser Corporation arranged a two-year, $1,000,000 loan to fund the foreign project. The loan is denominated in Mexican Pesos, carries 10% nominal rate, and requires equal semi-annual payments. The exchange rate at the time of loan was 5.75 pesos..
What is the value of a share of common stock that paid $2.00 last year, the growth rate is 8 percent, suppose the risk free rate is 4 percent, the market return is 10% and the Beta is 1.5.
Design a financial plan for them. How much would be their initial deposit? Would you use simple or compound interest? Would you compound the interest annually or monthly?
DNA Corporation issued $4,000,000 in 8%, 10-year bonds on February 1, 2010, at 115. Semiannual interest payment dates are January 31 & July 31.
Compute the value of duration for a 4-year, $1,000 par value U.S. Government bond purchased today at a yield to maturity of 15%. The bond coupon rate is 12 percent and it pays interest once a year at year end.
How to Finding the price of the bond of the Mangold Corporation has two different bonds currently outstanding
Objective questions on equity multiplier ratio and common size income statement
Over the past twenty years, the number of small family farms has fallen significantly also in their place there are fewer, but larger, farms owned by corporation.
Discuss the risk of Dell company.
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