What is the value per share be of a company with the following dividends?
Next years Dividend is expected to be $1.40
Expect Div Growth rates
13.40%
12.70%
10.80%
9.65%
7.70%
ROE = 13.47%
Plowback Rate= 61%
US T-BILL = 1.15%
BETA = 1.07
expect ret in Mkt = 10.83%
Please compute with excel
In: Finance
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Another utilization of cash flow analysis is setting the bid price on a project. To calculate the bid price, we set the project NPV equal to zero and find the required price. Thus the bid price represents a financial break-even level for the project. Guthrie Enterprises needs someone to supply it with 152,000 cartons of machine screws per year to support its manufacturing needs over the next five years, and you’ve decided to bid on the contract. It will cost you $1,920,000 to install the equipment necessary to start production; you’ll depreciate this cost straight-line to zero over the project’s life. You estimate that in five years this equipment can be salvaged for $162,000. Your fixed production costs will be $277,000 per year, and your variable production costs should be $9.70 per carton. You also need an initial investment in net working capital of $142,000. If your tax rate is 34 percent and you require a return of 12 percent on your investment, what bid price per carton should you submit? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
In: Finance
Abner Corporation's bonds mature in 17 years and pay 11 percent interest annually. If you purchase the bonds for $850, what is your yield to maturity?
In: Finance
1.a) Briefly describe how the Efficient Frontier and the Capital Allocation Line (CAL) are determined. Include all steps and procedures.
1.b) The CAL has the following parameters: Risk-free rate is 3 percent, return on the optimal risky portfolio is 12 percent, with a standard deviation (SD) of 20 percent. What is your expected return if you limit your risk to a Standard Deviation of 10 percent?
1.c) How do you achieve a 35 percent return using the parameters above? Explain and show precisely how you would achieve the return and also calculate the standard deviation of the portfolio.
This is all the info I've been given. I need to draw the efficient frontier and capital allocation line and describe both.
In: Finance
The market price is $1,200 for a 9 -year bond ($1,000 par value) that pays 8 percent annual interest, but makes interest payments on a semiannual basis (4 percent semiannually). What is the bond's yield to maturity?
In: Finance
discuss the role of paralegals with reference to the south african constitution
In: Finance
Provide and example of tax elimination. Explain.
In: Finance
Dmitri Ivanov is retiring soon, so he is concerned about his investments providing him steady income every year. He is aware that if interest rates , the potential earnings power of the cash flow from his investments will increase. In particular, he is concerned that a decline in interest rates might lead to annual income from his investments.
Dmitri Ivanov is retiring soon, so he is concerned about his investments providing him steady income every year. He is aware that if interest rates , the potential earnings power of the cash flow from his investments will increase. In particular, he is concerned that a decline in interest rates might lead to annual income from his investments. a) decrease, increase b) less, more
2. What kind of risk is Dmitri most concerned about protecting against?
Interest rate risk
Reinvestment rate risk
In: Finance
What is meant by an investor’s required rate of return? How do we measure risk in an investment? What do you consider a “risky” investment and a “safe” investment? What do you consider the tradeoff between risk and return of investments? Why are these concepts important to business leaders in Saudi Arabia? what are the risk versus return and doing business in Saudi ?Arabia.
In: Finance
The Robinson Corporation has $32 million of bonds outstanding that were issued at a coupon rate of 11.450 percent seven years ago. Interest rates have fallen to 10.450 percent. Mr. Brooks, the Vice-President of Finance, does not expect rates to fall any further. The bonds have 17 years left to maturity, and Mr. Brooks would like to refund the bonds with a new issue of equal amount also having 17 years to maturity. The Robinson Corporation has a tax rate of 30 percent. The underwriting cost on the old issue was 3.20 percent of the total bond value. The underwriting cost on the new issue will be 2.10 percent of the total bond value. The original bond indenture contained a five-year protection against a call, with a 9 percent call premium starting in the sixth year and scheduled to decline by one-half percent each year thereafter. (Consider the bond to be seven years old for purposes of computing the premium.) Use Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Assume the discount rate is equal to the aftertax cost of new debt rounded up to the nearest whole percent (e.g. 4.06 percent should be rounded up to 5 percent).
a. Compute the discount rate. (Do not round intermediate calculations. Input your answer as a percent rounded up to the nearest whole percent.)
b. Calculate the present value of total outflows. (Do not round intermediate calculations and round your answer to 2 decimal places.)
c. Calculate the present value of total inflows. (Do not round intermediate calculations and round your answer to 2 decimal places.)
d. Calculate the net present value. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.)
In: Finance
1. Wasp Corporation has a loan agreement that provides it with cash today, and the company must pay $25,000 one year from today, $15,000 two years from today, and $5,000 three years from today. Wasp agrees to pay 10% interest. Using excel compute the present value. Reminder steps are below:
1. Get into excel and go to Fx.
2. Make category financial.
3. In the rate box put the percentage in decimal format.
4. In the Nper (number of periods) put in the year criteria.
5. Pmt is the amount (to get rid of the negative you can make this a negative which will cancel it out.
6. The rest can be blank.
What is the amount of cash that Wasp receives today?
In: Finance
1.What is the future value of $2,500 invested today at 12% interest in 5 years with interest compounded quarterly? (show workout)
$4,515.28
$4,552.15
$1,384.19
$4,405.85
$4,031.50
2.What is the present value of $13,500 received 5 years from now using a 16% interest or discount rate, with interest compounded daily? (Show workout)
$6,223.44
$6,161.22
$5,230.18
$30,039.54
$6,067.00
3.
Assume that you are a saver, and use coupons. Each week you save $5.00 using coupons, and save the money for your retirement. What is the future value of $5.00 (five dollars) deposited at the beginning of each week for 45 years earning 10% interest? (Show workout)
$7,052.15
$230,435.33
$298,538.23
$230,878.47
$3,594.52
In: Finance
How does Target’s business model compare with Walmart’s and Costco’s?
In: Finance
After deciding to get a new car, you can either lease the car or purchase it with a three-year loan. The car you wish to buy costs $34,500 (fancy car, isn't it!). The dealer has a special leasing arrangement where you pay $1 today and $450 per month for the next three years. If you purchase the car, you will pay it off in
monthly payments over the next three years at an 8 percent APR. You believe that you will be able to sell the car for $27,000 in three years.
a. Should you buy or lease the car?
b. What breakeven resale price in three years would make you indifferent between buying and leasing?
show all work on excel
In: Finance
When organizations decide to finance assets, the key is to match meaning current assets with current financing and long term assets with long term financing.
What would be an example of this occurring in business today and what would be the disadvantage from not matching?
In: Finance