What about the future value of the investment

Assignment Help Financial Management
Reference no: EM132071468

The investment should be made now because due to higher market interest rate, it would be available at discounted price with reduction of 2% it is expected that MV will be up. I think that the effect on ABC's financial statements would be that the Capitol Gains and profit in the financial statement would increase. Furthermore, one should hold the bonds until it gives a capital gain.

But what about the future value of the investment, Could that change an investors decision at all? If so how?

Reference no: EM132071468

Questions Cloud

What is the number one job of management in company : What is the number one job of management in a company? Do you believe the Shareholders are happy with their returns?
Value of bond to someone who is unfamiliar with bonds : Describe the value of a bond to someone who is unfamiliar with bonds?
What is the percentage cost of preferred shares : If the preferred shares are currently selling for $150 per share, what is the percentage cost of preferred shares?
What is change in price the bond will experience in dollars : You believe that in one year, the yield to maturity will be 6.0 percent. What is the change in price the bond will experience in dollars?
What about the future value of the investment : But what about the future value of the investment, Could that change an investors decision at all? If so how?
Determine the after-tax cash outflows of northwest lumber : Determine the after-tax cash outflows of Northwest Lumber under each alternative. Which alternative – lease or purchase – would you recommend? Why?
Compute the stock price for cain auto supplies : Compute the stock price for Cain Auto Supplies if it sells at 15 times EPS and EBIT is $66,000.
What is the economic ordering quantity : What is the economic ordering quantity? How many orders will be placed during the year? What is the total cost of inventory expected to be?
Which will occur with the external financing : Assume there is no increase in liabilities other than that which will occur with the external financing.

Reviews

Write a Review

Financial Management Questions & Answers

  Social security purposes based only on this year earnings

How many quarters of coverage has Jordan attained for Social Security purposes based only on this year’s earnings?

  Postage stamps per year to the postal service

Consider a project to supply 118 million postage stamps per year to the U.S. Postal Service for the next five years.

  What is expected horizon yield for real estate investment

You own an apartment complex made up of 10 units each of which is rented out at a monthly rent of $1000. You purchased the facility 2 years ago for $1,000,000, and plan to hold the complex for another 8 years at which time you expect to sell the faci..

  Yield to maturity on long-term government bonds

Key facts and assumptions concerning Costco Company, at December 31, 2011, appear below: Yield to maturity on long-term government bonds: 3.28%. Yield to maturity on company long-term bonds: 4.62%. Estimate Costco's cost of equity capital. Estimate C..

  What is initial investment and how much stock should we buy

What is the initial investment, and how much stock should we buy?

  Sales increase-company achieve without having to raise funds

How large of a sales increase can the company achieve without having to raise funds externally?

  Draw single relational schema for the four user views

Merge the relations for the four user views into a single set of 3NF relations, using the guidelines presented in this chapter. Draw a single relational schema for the four user views and show the referential integrity constraints

  What is the net cost of the call premium

Buchanan Corp. is refunding $10 million worth of 10% debt. The new bonds will be issued for 8%. The corporation's tax rate is 35%. The call premium is 9%. What is the net cost of the call premium? A bond with a coupon rate of 6.5%, maturing in 10 yea..

  Determine value of cost of sales and ending inventory

Determine the value of Cost of Sales and Ending Inventory for lobsters in March using:

  Calculate and interpret net present value method

Calculate and interpret net present value (NPV) method for investment decisions with suitable example.

  What is the required rate of return on MNC stock

Midsouth Chemical has a beta of 0.85. The risk-free rate of interest is 3.5%, and the return on an average stock is 6.4%. What is the required rate of return on MNC stock?

  Differences between futures contracts and options contracts

Which of the following is NOT among the differences between futures contracts and options contracts?

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