Questions
Compound Annual Growth Rate

If you were offered $15,000 fifteen years from now in return for an investment of $5,000 currently, what annual rate of interest would you earn if you took the offer?

In: Finance

Equity

A company has 5 million common stock. If the market price of the stock is $45 what is the market value of equity?

In: Finance

Current Yield

If a stock pays a dividend of $50 and its market price is $950. What is the current yield of that stock?

In: Finance

Future Value

Mr. B will receive $100,000 at the end of the 5th year. If opportunity cost is 9%. What will be the present value of the amount today?

In: Finance

Holding Period Return

If you bought a security at $1,000 and after one year it is sold for $1,250 

What is the holding period return of the investment?

In: Finance

Simple Interest

$50,000 borrowed from a bank for a simple interest of 8% p.a. for three years. What is the amount of interest to be paid on loan at the end of three year ?

In: Finance

Capital Asset Pricing Model

If the risk-free rate in the market is 4% and the expected return from the market is 10%. What will be the expected return from your stock if it has a beta of 1.2?

In: Finance

Compound interest

If a loan of $100,000 is taken from a bank at 12% interest compounded monthly. What amount of loan will be repaid at the end of 2nd year?

In: Finance

Present Value

If an investment of $50,000 is made today carrying at an interest rate of 5%. What will be its value after 10 years?

In: Finance

Dividend Growth Model

A company has just paid a dividend of $1.50 and it is expected to grow 6% per year for an indefinite period of time.  If the required rate of return on the stock is 12% What would you pay most for the stock?

In: Finance

Payback Period

A project has an initial cost of $500,000 whereas it has an expected annual cash flow of $75,000 each year for the next 10 years. The firm has the criteria of accepting the project if its payback period is 6 years or less. Based on the payback period, state whether the project would be accepted or not?

In: Finance

effective annual interest rate

You have received a loan from a bank with a quoted rate of 18 percent compounded monthly. What is the Effective annual interest rate of the loan?

In: Finance

Dividend Yield

Assume you have a bond with a semiannual interest payment of $35, a par value of $1,000, and a current market of $780. What is the current yield of the bond?

In: Finance

Cost of Debt

ABC can borrow funds at an interest rate of 7.30% for a period of six years. Its marginal federal-plus-state tax rate is 30%. ABC's after-tax cost of debt is (round to two decimal places). At the present time, ABC has 15-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,555.38 per bond, carry a coupon rate of 11%, and distribute annual coupon payments. The company incurs a federal-plus-state tax rate of 30%. If ABC wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt (rounded to two decimal places)?

a) 2.57%

b) 3.99%

c) 5.71%

d) 6.84%

In: Finance

Exchange Rate

The exchange rate is 1.1069 Swiss francs per U.S. dollar. How many U.S. dollars are needed to purchase 9,874 Swiss francs? Enter your answer rounded off to two decimal points.

In: Finance