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Assume you expect the company's net income to remain stable at $2000 for all future years, and you expect all earnings to be distributed to stockholders at the end of each year, so that common equity also remains stable for all years (this also assume a clean surplus). Also, assume the compnay's beta=1.2, the market on risk premium is 6% and 10-year yield on risk free government bonds is 3%. Finally, assume the company has 1000 ordinary shares outstanding.
Problem 1: Using CAPM to estimate the company's equity cost of capital?
Problem 2: Compute the expected net distributions to stakeholders (dividends) for each future year.
Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest. How much control does the Fed have over this longer real rate?
Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.
Accounting problems, Draw a detailed timeline incorporating the dividends, calculate the exact Payback Period b) the discounted Payback Period. the IRR, the NPV, the Profitability Index.
Term Structure of Interest Rates
Write a report on Internal Controls
Prepare the bank reconciliation for company.
Create a cost-benefit analysis to evaluate the project
Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR
Distinguish between liquidity and profitability.
Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.
Simple Interest, Compound interest, discount rate, force of interest, AV, PV
CAPM and Venture Capital
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