Reference no: EM13970018
1) Look up 3 stocks that are in the same industry using Yahoo! Finance. Rank their P/E ratios from highest to lowest (be sure to label it!). Suppose a new competitor appears whose earnings are $0.50 per share. Using the ratios method we learned in class, what should its stock price be?
2) A 10-year US Treasury bond with a face value of $10,000 pays a coupon of 5.5% (2.75% of face value every 6 months). The semiannually compound interest rate is 5.2% (a six-month discount rate of 5.2/2 = 2.6%). What is the present value of the bond?
3) The formula for the duration of a perpetual bond that makes an equal payment each year in perpetuity is (1+yield) / yield.
a. If each bond yields 5%, which has the longer duration - a perpetual bond or a 15-year zero coupon bond?
b. Same as part a, but what if the yield is 10%?
4) In early 2012, Aaa bonds yielded 5.3% and Baa bonds yielded 5.9%. If some bad news causes a 10% five-year bond to be unexpectedly downrated from Aaa to Baa, what would be the effect on the bond price? Assume annual coupons.
5) Suppose that you buy a two-year 8% bond at its face value. What will be your nominal return over the two years if inflation is 3% in the first year and 5% in the second year? What will be your real return?
6) Consider the following three stocks:
a. Stock A is expected to provide a dividend of $10 per share forever
b. Stock B is expected to pay a dividend of $5 next year. Thereafter, dividend growth is expected to be 4% forever.
c. Stock C is expected to pay a dividend of $5 next year. Thereafter, dividend growth is expected to be 20% a year for 5 years (i.e., until year 6) and zero thereafter.
If the market capitalization rate for each stock is 10%, which stock is the most valuable? What if the capitalization rate is 7%?
|
Provide information about initial simulated purchase price
: Provide information about the initial simulated purchase price of your bonds. The following are several good online resources for bonds
|
|
Which layout strategy would you recommend to this company
: Which layout strategy would you recommend to this company to improve its workflow and processes? What kind of enhancements would you recommend to improve product's movement
|
|
Describing the approach to care of cancer
: Describe the diagnosis and staging of cancer - describe at least three complications of cancer, the side effects of treatment, and methods to lessen physical and psychological effects.
|
|
What is the payment every year
: You have decided to buy a perpetuity. The bond makes one payment at the end of every year forever and has an interest rate of 5%. If you initially put $1000 into the bond, what is the payment every year?
|
|
What is the present value of the bond
: In early 2012, Aaa bonds yielded 5.3% and Baa bonds yielded 5.9%. If some bad news causes a 10% five-year bond to be unexpectedly downrated from Aaa to Baa, what would be the effect on the bond price? Assume annual coupons.
|
|
What iris after-tax cash flow this year from this investment
: Cameron pays 15% in dividend and capital gains taxes and 35% in ordinary income taxes. Ten years ago, Cameron purchased a position in a limited partnership for $10,000. Three years later, she was required to contribute $2,000 more to the partnersh..
|
|
What is the monthly house note for each option
: You plan on buying a home that costs $200,000. The bank is offering you a 30-year mortgage at 6% interest with 2 points or 7.25% interest with no points. What is the monthly house note for each option. Which would you take?
|
|
What expenses can be deferred to the new fiscal year
: A changing staffing pattern as a result of high acuity on your unit. Your care managers have requested permanent staff lines - How you will address these requests based on the budget print out.
|
|
How evidence-based patient care can improve quality of care
: Describe how research affects existing knowledge within professional nursing. Explain how evidence-based patient care can improve the quality of care
|