Types of profitable investment opportunities

Assignment Help Financial Management

Reference no: EM131886443

1. If the cost of debt is less than the cost of equity, why doesn’t the firm’s cost of capital continues to decrease with the use of more and more debt? (Minimum 200 Words)

2. You have discovered that when the required rate of return on a bond you own fell by 0.5 percent from 8 percent to 7.5 percent, the fair present value rose from $940 to $960. What is the duration of this bond? Assume annual payments. ((Do not round intermediate calculations. Round your answer to 2 decimal place. (e.g., 32.12))

Duration of this bond years

3. Explain how to identify the sources and types of profitable investment opportunities. What makes an investment profitable?

Reference no: EM131886443

Questions Cloud

What is environmental risk to an investor in property : What is "Environmental Risk" to an Investor in Property? Should Leasing Commissions be considered when Investing in Real Estate?

Define transaction exposure : Define transaction exposure. Why is transaction exposure the most important type of currency exposure?

Current rate for two-year treasury security : According to the unbiased expectations theory, what should be the current rate for a two-year Treasury security?

Toll road can be built one of two ways : A toll road can be built one of two ways. It can be built as one entity and opened at once at an initial cost of $20 M.

Types of profitable investment opportunities : Explain how to identify the sources and types of profitable investment opportunities. What makes an investment profitable?

New firm in rapidly growing industry : The Bell Weather Co. is a new firm in a rapidly growing industry. What is the current value of one share of this stock if the required rate of return is 8.20 %

Describe the money market approach : Describe the money market approach, how it would work, and how much the firm ends up with

Crypto currency and specifically bitcoin : What is the idea behind crypto currency and, specifically Bitcoin? What are the larger implications of Bitcoin on the markets and the economy overall?

How much accrued interest must be paid to the seller : if an investor purchases this bond two months before a scheduled coupon payment, how much accrued interest must be paid to the seller?

User Account

All Pages