A friend has approached you for advice because they know you are in an investments class. The friend’s grandfather has made a gift to the friend of $25,000 with the requirement that the money be used to invest in a minimum of 5 individual stocks. (The grandfather is an old-school stock investor and feels strongly that investing in stocks will help your friend understand the markets and the economy and will improve your friend’s decision-making skills.)
What are the three things you would want your friend to understand before they begin investing? In addition to those three things, how would you advise your friend to go about evaluating what stocks to choose? (You are not recommending a stock, you are advising them how they can choose a stock.) Finally, would you suggest they go about executing their transactions?
In: Finance
3. A saver wants $100,000 after ten years and believes that it is possible to earn an annual rate of 8 percent on invested funds.
What amount must be invested each year to accumulate $100,000 if (1) the payments are made at the beginning of each year or (2) they are made at the end of each year?
How much must be invested annually if the expected yield is only 5 percent?
please explain step by step process.DO NOT COPY AND PASTE PREVIOUS ANSWERS
In: Finance
Explain whether the dividend policy of a company affects its
value, by describing the
various theories that have been put forward in the literature.
Provide for each theory at
least two references from published papers in scientific journals
(approximately 1,000
words).
In: Finance
Suppose your selected company(choose one of the two) just paid a dividend of $ 2.20 per share. The dividend are to calculate the share's expected return. You observe that the risk-free rate of return on us treasuries is 2% p.a, the market risk premium is 7 % and the company's equity has a current beta of 1.285. what is the market value of the company's shares? Compare the actual closing price of your selected company's share on the balance sheet date. Why might the actual share price differ from the calculated price? explain. I choose Woolworth ltd in australia and the other company is Wesfarmers Ltd
In: Finance
Dividend policy
a. Define the information content effect of a dividend, and discuss whether or not it conveys information about a firm’s dividend policy.
b. Define the clientele effect of dividend policy, and discuss whether or not it conveys information about a firm’s market value.
In: Finance
|
Suppose you own 50,000 shares of common stock in a firm with 2.5 million total shares outstanding. The firm announces a plan to sell an additional 1.5 million shares through a rights offering. The market value of the stock is $35 before the rights offering and the new shares are being offered to existing shareholders at a $5 discount. |
| a. |
If you exercise your preemptive rights, how many of the new shares can you purchase? |
| New shares |
| b. |
What is the market value of the stock after the rights offering? (Enter your answer in millions rounded to 1 decimal place. (e.g., 32.1)) |
| Market value | $ million |
| c-1. |
What is your total investment in the firm after the rights offering? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places. (e.g., 32.16)) |
| Total investment | $ million |
| c-2. |
If you exercise your preemptive right how many original shares and how many new shares do you have? |
| Original shares | |
| New shares | |
|
|
|
| d-1. |
If you decide not to exercise your preemptive rights, what is your investment in the firm after the rights offering? (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places. (e.g., 32.161)) |
| Investment | $ million |
| d-2. |
If you sell your rights rather than use them, how much money will you receive from the rights sale and what is the total value of your proceeds from the sale of the rights offering plus your investment in the firm? (Enter your answer in millions rounded to 3 decimal places. (e.g., 32.161)) |
| Sale of rights | $ million |
| Total investment | $ million |
|
|
|
In: Finance
Russia’s Alternative Currency Bonds.
On March 17, 2018, the Russian Federation issued USD 4bn in eurobonds (what are they?) with an unusual provision. The issuer reserves the right pay bondholders principal and interest in EUR, GBP, or CHF should the Russian Federation be unable to make payment in USD for “for reasons beyond its control..”
Working for the chief investment officer (CInvO) of NoNaCaPa (No-Name Capital Partners), a prominent hedge fund, you are analyzing the bonds to determine what their risk and rewards are. Your company is USD based but not averse to taking on foreign currency risk to enhance a position’s return potential. Your starting point is the attached Financial Times article which you supplement by your own research. In particular, you wonder about the alternative-currency clause in the indenture (debt contract) and how it might affect the investment performance of the bonds.
(a) Research dual- or multiple-currency debt securities which are typically issued in the eurobond market.
• What do they consist of? How can you unbundle the bonds into its constituent parts?
• What are eurobonds?
(b) In comparison to multiple curency bonds, what does the alternative currency payment provision effectively amount to?
(c) What motivates the alternative currency payment provision and how does it affect the pricing of the bonds?
(d) What risk factors do investors face? Present the risks in tabular form distinguishing between financial from nonfinancial risks which obviously translate into financial risks at a later stage. Identify each risk’s origin and nature,who bears it, its impact on bond pricing, and whether and how investors can hedge or not against it.
(e) What investment recommendation would you give to your CInvO? Explain your advice and motivate your investment thesis, i.e., the rationale why or why not you should participate in the transaction.
In: Finance
Cornerstone Exercise 4.5 (Algorithmic)
Activity-Based Product Costing
Roberts Company produces two weed eaters: basic and advanced. The company has four activities: machining, engineering, receiving, and inspection. Information on these activities and their drivers is given below.
| Basic | Advanced | Total | ||||
| Units produced | 80,000 | 240,000 | ------ | |||
| Prime costs | $6,720,000 | $27,360,000 | $34,080,000 | |||
| Machine hours | 80,000 | 400,000 | 480,000 | |||
| Engineering hours | 500 | 4,500 | 5,000 | |||
| Receiving orders | 200 | 600 | 800 | |||
| Inspection hours | 800 | 1,600 | 2,400 | |||
| Overhead costs: | ||||||
| Machining | $7,200,000 | |||||
| Engineering | 2,250,000 | |||||
| Receiving | 192,000 | |||||
| Inspecting products | 336,000 |
Required:
1. Calculate the four activity rates.
| Machining rate | $ per machine hour |
| Engineering rate | $ per hour |
| Receiving rate | $ per order |
| Inspecting rate | $ per hour |
2. Calculate the unit costs using activity rates. Round your answers to the nearest cent.
| Unit cost | |
| Basic | $ per unit |
| Advanced | $ per unit |
Calculate the overhead cost per unit. Round your answers to the nearest cent.
| Overhead Cost | |
| Basic | $ per unit |
| Advanced | $ per unit |
3. What if consumption ratios instead of activity rates were used to assigned costs? Show the cost assignment for the inspection activity.
| Cost assignment | |
| Basic | $ |
| Advanced | $ |
In: Finance
What is the global significance of Wall street or stock market in U.S and why is it important? Also, what are global implications if say the market were to crash or go down? Give a thorough explanation please..
In: Finance
Suggest a way to fund the business. Recommend how to attract equity investors. Please provide reference
In: Finance
Give recommendation 10 strategies to risks management in Islamic financing?
In: Finance
Go to the Internet and find the following ratios for McDonald Corporation (MCD). Give the source of your information.
|
Debt Management |
Formula |
Calculation |
Ratio |
|
Debt ratio |
total debt/total asset |
||
|
Interest coverage |
EBIT/Interest Charge |
||
|
Profitability |
|||
|
Net profit margin |
net income/total operating revenue |
||
|
Net return on assets |
net income/total operating asset |
||
|
Return on common equity |
net income to stockholders/ average common equity |
||
|
Dividend payout ratio |
total cash dividends/net income |
||
|
Market Value |
|||
|
P-E ratio |
(market price/share) / earnings/share |
||
|
Market/Book |
(market price/share) / (book value/share) |
||
|
Dividend yield |
(dividend per share) / market price per share |
In: Finance
Under what circumstances might multinational firms be less subject to exchange risk than purely domestic firms in the same industry?
In: Finance
1. Explain the importance of the Financial Sector in
Mauritius?
2. Developments of the Financial System In Mauritius
3. Performance of the Financial System in Mauritius?
In: Finance
NEED ANSWER ASAP / ANSWER NEVER USED BEFORE
some considerations should be taken into account when doing capital budgeting: incremental earnings, interest expenses, taxes, opportunity costs, externalities, sunk costs, cannibalization or erosion, depreciation, salvage value, and others. explain in detail what defines capital budgeting. Then explain how two of the considerations above affect capital budgeting.
ANSWER THROUGHLY 1-2 pages
COPY AND PASTE NOT ATTACHMENT PLEASE
NEEDS TO BE AN ORIGINAL SOURCE ANSWER NEVER USED BEFORE
*****NEEDS TO BE A ORIGINAL SOURCE****
In: Finance