Reference no: EM133062459
1. The present value of JECK Co.'s expected free cash flows is $100 million. If JECK has $30 million in debt, $6 million in cash, and 2 million shares outstanding, what is its share price?
2. River Enterprises has $500 million in debt and 20 million shares of equity outstanding. Its excess cash reserves are $15 million. They are expected to generate $200 million in free cash flows next year with a growth rate of 2% per year in perpetuity. River Enterprises' cost of equity capital is 12%. After analyzing the company, you believe that the growth rate should be 3% instead of 2%. How much higher (in dollars) would the price per share of stock be if you are right?
3. Your firm is considering two one-year loan options for a $500,000 loan. The first carries fees of 2% of the loan amount and charges interest of 4% of the loan amount. The other carries fees of 1% of the loan amount and charges interest of 4.5% of the loan amount.
What is the net amount of funds from each loan?
Based on the net amount of funds, what is the true interest rate of each loan?
4. Suppose that on January 15, 2018, the U.S. Treasury issued a 10-year inflation-indexed note with a coupon of 6%. On the date of issue, the CPI was 200. If the CPI decreases to 150 by January 15, 2028, what principal and coupon payment will be made on January 15, 2028?
5. Your firm's bank has offered you two options for short-term financing in the amount of $400,000. The first option is a committed line of credit with a commitment fee of 0.5% (EAR) and an interest rate of 8% (APR, compounded quarterly). The second option is a loan with a 5% compensating balance and an interest rate of 7.6% (APR, compounded quarterly). If you need $380,000 in financing at the beginning of the year and plan to pay it back at the end of the year, which option has a lower effective annual rate of interest?
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Hedging with put options
: As treasurer of Killam Corp. (a U.S. exporter to Australia), you must decide how to hedge (if at all) future receivables of AUD 2,000,000
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Determining the operational information
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Find the amount due on the maturity date
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Provide the largest increase in eps
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What is share price
: 1. The present value of JECK Co.'s expected free cash flows is $100 million. If JECK has $30 million in debt, $6 million in cash, and 2 million shares outstandi
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What amount can Tracey deduct as a medical expense
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Determining the personal finance sector
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Will bryte be assessable on the stipend
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Prepare the lease amortisation schedule for the period
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