Question
In: Finance
The Redford Investment Company bought 90 Cinema Corp. warrants one year ago and would like to...
The Redford Investment Company bought 90 Cinema Corp. warrants one year ago and would like to exercise them today. The warrants were purchased at $30 each, and they expire when trading ends today (assume there is no speculative premium left). Cinema Corp. common stock is selling today for $59 per share. The exercise price is $36 and each warrant entitles the holder to purchase two shares of stock, each at the exercise price. a. If the warrants are exercised today, what would the Redford Investment Company’s dollar profit or loss be? (Do not round intermediate calculations. Input your dollar answer as a positive value rounded to the nearest whole dollar.) b. What is the Redford Investment Company’s percentage rate of return?
Solutions
jeff jeffy answered 8 months agoRelated Solutions
One year ago, your company purchased a machine used in manufacturing for $ 90 comma 000....
One year ago, your company purchased a machine used in
manufacturing for $ 90 comma 000. You have learned that a new
machine is available that offers many advantages and that you can
purchase it for $ 170 comma 000 today. The CCA rate applicable to
both machines is 40 %; neither machine will have any long-term
salvage value. You expect that the new machine will produce
earnings before interest, taxes, depreciation, and amortization
(EBITDA) of $ 45 comma 000...
why would a company be inclined to issue warrants?
why would a company be inclined to issue warrants?
X Company is unhappy with a machine that they bought just a year ago for $43,000....
X Company is unhappy with a machine that they bought just a year
ago for $43,000. It is considering replacing it with a new machine
that will save significant operating costs. Operating costs with
the current machine are $68,000 per year; operating costs with the
new machine are expected to be $46,000 per year. Both machines will
last for 5 more years.The current machine can be sold immediately
for $7,000 but will have no salvage value at the end of...
One year ago you bought a share of Bavarian Sausage stock for $46.50. During the year...
One year ago you bought a share of Bavarian Sausage stock for
$46.50. During the year the stock paid a $2.75 dividend. You have
decided to sell the stock exactly one year after the purchase
(today). If dividends are growing at 4% and the
required rate of return is 9.42%, what is the percentage return of
your stock investment?
a.
5.91%
b.
13.44%
c.
26.69%
d.
19.39%
You manage a real estate investment company. One year ago, the company purchased 10 parcels of...
You manage a real estate investment company. One year ago, the
company purchased 10 parcels of land distributed throughout the
community for $ 11.2 million each. A recent appraisal of the
properties indicates that five of the parcels are now worth $9.0
million each, while the other five are worth $17.0 million each.
Ignoring any income received from the properties and any taxes paid
over the year, calculate the investment company’s accounting
earnings and its economic earnings in each of...
You manage a real estate investment company. One year ago, the company purchased 10 parcels of...
You manage a real
estate investment company. One year ago, the company purchased 10
parcels of land distributed throughout the community for $ 10.6
million each. A recent appraisal of the properties indicates that
five of the parcels are now worth $8.4 million each, while the
other five are worth $16.0 million each. Ignoring any income
received from the properties and any taxes paid over the year,
calculate the investment company’s accounting earnings and its
economic earnings in each of...
One year ago, you bought the ABC bond with a maturity of 30 years for $980....
One year ago, you bought the ABC bond with a maturity of 30
years for $980. The bond’s capital gains yield is -0.3% as of
today. The bond’s coupon rate is 7.0% with semiannual payment of
coupon. What is the YTM for the bond as of today?
Suppose you bought a bond with an annual coupon of 7 percent one year ago for...
Suppose you bought a bond with an annual coupon of 7 percent one
year ago for $1,010. The bond sells for $985 today.
a.
Assuming a $1,000 face value, what was your total dollar return
on this investment over the past year?
b.
What was your total nominal rate of return on this investment
over the past year? (Do not round intermediate calculations and
enter your answer as a percent rounded to 2 decimal places, e.g.,
32.16.)
c.
If the...
Suppose you bought a bond with an annual coupon of 7 percent one year ago for...
Suppose you bought a bond with an annual coupon of 7 percent
one year ago for $1,090. The bond sells for $1,160 today.
Assuming a $1,000 face value, what was your total
dollar return on this investment over the past year?
What was your total nominal rate of return on this investment
over the past year?
If the inflation rate last year was 6 percent, what
was your total real rate of return on this investment?
You bought a stock one year ago for $ 50.14 per share and sold it today...
You bought a stock one year ago for $ 50.14 per share and sold
it today for $ 58.83 per share. It paid a $ 1.74 per share dividend
today. If you assume that the stock fell $ 7.42 to $ 42.72
instead: a. Is your capital gain different? Why or why not? b.
Is your dividend yield different? Why or why not?
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