Suppose you are valuing a future stream of high-risk

Assignment Help Finance Basics
Reference no: EM13573727

Suppose you are valuing a future stream of high-risk (high-beta) cash outflows. High risk means a high discount rate. But the higher the discount rate, the less the present value. This seems to say that the higher the risk of cash outflows, the less you should worry about them! Can that be right? Should the sign of the cash flow affect the appropriate discount rate? Explain.

Reference no: EM13573727

Questions Cloud

Discuss how and why a community development approach would : essay-2000 words covering the following points1. discuss how and why a community development approach would be
Jde has a nltcg of 25000 and a nstcl of 30000 what is : jude has a nltcg of 25000 and a nstcl of 30000. what is judes 2011 capital loss deduction if judes adjusted gross
The pool has an estimated useful life of 5 years the : the pool has an estimated useful life of 5 years. the appraisal was to determine the value of robertos residence with
Arbitrage and exchange gain or loss you own 10000 the : arbitrage and exchange gain or loss. you own 10000. the dollar rate on the swiss franc is 1.380 sfs.countrycontractus
Suppose you are valuing a future stream of high-risk : suppose you are valuing a future stream of high-risk high-beta cash outflows. high risk means a high discount rate. but
Estimate the opportunity cost of capital and the projects : a project has the following forecasted cash flowscash flows thousandsc0c1c2c3-100406050the estimated project beta is
If the required return is 10 and robb computer applies the : the robb computer corporation is trying to choose between the following two mutually exclusive design projectsyear cf
Prepare a cash budget by month and in total for the third : natural care corp. a distributor of natural cosmetics is ready to begin its third quarter in which peak sales occur.
I need a 12 pages paper about education in saudi arabia : i need a 12 pages paper about education in saudi arabia including school system. i also want one work cited page. this

Reviews

Write a Review

Finance Basics Questions & Answers

  Calculate the default risk premium

The maturity risk premium is 0.10 percent on 4-year securities and increases by 0.03 percent for each additional year to maturity. Calculate the default risk premium on Nikki G's 10-year bonds.

  Businesses work to compliment or substitute

Marc has opened a twenty-four hour fitness center in a fast growing city. Before buying the franchise and starting his new business, Marc looked at the one other fitness center currently operating in that area.

  Firm x has a tax rate of 30 the price of its new preferred

firm x has a tax rate of 30. the price of its new preferred stock is 63 and its flotation cost is 3.15. the cost of new

  What is the maximum lump sum payment you are willing to make

What is the maximum lump sum payment you are willing to make today to buy these six future annual shipments?

  Consider the following projects x and y where the firm can

consider the following projects x and y where the firm can only choose one. project x costs 600 and has cash flows of

  Find total amount after years of compounded interest

If someone is 21 years old, deposits $5000 each year into a traditional Individual Retirement Account how much money will be in the account upon retirement?

  Compute the net income for the year

Assume that retained earnings increased by $400,000 from December 31, 2011, to December 31, 2012, for Jarvie Distribution Corporation. During the year, a cash dividend of $135,000 was paid.

  Finding present value

Can you please show me how to solve the following problems in M.S. excel? Please note that Present Value stands for present value.

  What is the net cost of the spectrometer that is what is

you have been asked by the president of your company to evaluate the proposed acquisition of a new spectrometer for

  Which of these measures is an evaluation of a companys

which of these measures is an evaluation of a companys ability to pay current liabilities?a earnings per share.b

  Should this project be accepted

Fijisawa Inc. is considering a major expansion of its product line and has estimated the following cash flows associated with such an expansion.

  What is the best estimate of the current stock price

Its dividend growth rate is expected to be constant at 15% for 2 years, after which dividends are expected to grow at a rate of 6% forever. Its required return is 12%. What is the best estimate of the current stock price?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd