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A zero coupon bond
A 5% coupon bond
An 8% coupon bond
Suppose you are Investing money in an RESP (Registered Educational Savings Plan) to meet your child’s post-secondary schooling expenses. You expect you will have to pay out $20,000 per year for 4 years starting 9 years from now. We will just consider the first year’s obligation of $2,000. You have available the three bonds described in above.
a. Calculate the current price and duration of each bond.
b. Calculate the shares of Bonds 1 and 3 in an optimal immunized portfolio.
The difference between flotation-adjusted cost of equity and cost of equity calculated without flotation adjustment represents the flotation cost adjustment.
Describe the dividend theories: dividend irrelevance, dividend preference, tax effect theory, clientele effect, and signaling hypothesis.
Broadly speaking, what was the average risk of cash, bonds, and stocks? - What time period are your numbers from?
Determine the annual financing cost, before considering cost savings and bad-debt losses.- Determine the annual financing cost, after considering cost savings and bad-debt losses.
What is the maximum amount of money the company that initiates the project be willing to invest to start the project today
A stock has a beta of 1.18, the expected return on the market is 11.2 percent, and the risk-free rate is 4.85 percent.
At an output level of 12,400 units, you have calculated that the degree of operating leverage is 2.70. The operating cash flow is $46,000 in this case. Ignoring the effect of taxes, what are fixed costs?
Let us say that you know all about Beta and you decide to invest $10,000 and borrowed $10,000 to purchase shares in IBM. IBM was selling at $100 per share. How many shares could you have bought if you paid $250 in commission and did not use margin?
On September 3, John Smith paid $450,000 for a residential rental property. This purchase price represents $275,000 for the building and $175,000 for the land. Six years later, on June 26, he sold the property for $475,000. Compute the MACRS deprecia..
You open a brokerage account and purchase 200 shares of Google at $443.05 per share. You borrow 40% from your broker to help pay for the purchase. The interest rate on the loan is 8%. One year after purchase, Google’s price is $320. What is your new ..
Each bond has a face value of $1,000 payable at maturity in 11 years. What is the yield to maturity for these bonds?
Harry and Harriett own 1,000 shares of Al Inc. in a brokerage account that is titled "Harry and Harriett, Tenancy-in-Common."
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