Question

In: Finance

Suppose you have $400 to invest today at 7%, how much will you have saved in...

Suppose you have $400 to invest today at 7%, how much will you have saved in 20 years?

You have an opportunity to invest in a UK Consol Bond that will pay you $40 quarterly forever, if the opportunity cost of your funds is 12%, what is fair market price for you to pay?

In general the easiest form of organization to raise large amounts of capital quickly is

Which of the following is NOT an example of an agency issue?

A) A homeowner hiring a real estate agent to find a renter for their home.

B) Sole Proprietor making-a-decision to take a month-long international business trip.

C) Corporate executive deciding to use a private plane instead of public carrier.

D) A race-horse owner hiring a trainer.

E) All the above are examples of an agency issue.

Solutions

Expert Solution

Ans 1. PVAF (7%, 20Years) :

$400/0.31180 = $1282.87

Ans 2. Present value of bonds = Income / discount rate

$40/0.03

$1333.33

Ans 3. Private placement of shares

Ans 4. C


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