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Time value of money. Use excel, show process
You are deciding whether to add a renewable energy stock to your portfolio, and have read a couple of reports on the company. You're trying to do your own calculations. You are concerned about projections for the company's growth rate. The company's cost of equity capital (the discount rate for its equity) is known to be 10%. The company just paid a dividend of $2 per share. When calculating the value of the stock today, you cannot decide if the constant growth rate will be 4% or 5%. By how much does this seemingly small difference impact your valuation, i.e., the price per share?
Hint: Using the growing perpetuity formula, the DIV or C will be NEXT year's payment.
You have a bond with annual coupon payments of $30, the interest rate for comparable bonds is 5%, and there is a maturity value of $150 in 4 years. What is the current price of the bond? You buy a bond that is selling at par. ($100 face value, 8% cou..
Calculate the roll-over from Crude futures from Dec 17 to Jan 18.
Calculate the NPV for each of the projects shown in the following table and indicate whether or not each is acceptable.
Suppose the current rate on a 5-year Treasury is 4.5%, the current rate on a 4-year Treasury is 4.25%, and the one-year rate is 2.84%. Using the unbiased expectations theory, what is the expected one-year rate during year 5, E(5r1)?
For an interest rate of 12% compounded quarterly, what single deposit, made now, will fund this endowment?
Alexander Corp. will pay a dividend of $3.90 next year. The company has stated that it will maintain a constant growth rate of 4.75 percent a year forever. If you want a 16 percent rate of return, how much will you pay for the stock?
Molly Grey (single) acquired a 30 percent limited partnership interest in Beau Geste LLP several years ago for $67,000.
The Wall Street Journal reports a bond price of $582.50. These bonds are convertible into common stock. Why do you think a company would issue this type of bond?
If the yield on a Treasury security is 3% and that of a similar-maturity municipal bond is 2.5%, what is the muni-Treasury yield ratio for this municipal bond?
What is the net present worth of this automation system? Don't forget to use the market interest rate.
What is the current (time 0) value of a share of Highland stock?- What value would you project for a share of stock at the beginning of year 3?
A firm's financial statements show cash of $2100, annual sales of $48500, What is the firm's basic earning power?
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