discuss the concepts of liquidity, solvency and DSO's as they pertain to cash-flows and the overall health of a business.

PLEASE SOLVE ONLY USING EXCEL

Samuel agreed to pay $550,000 for a house. He made a $125,000 down payment and financed the balance using a 30-year, 6 % per annum compounded monthly conventional loan.

a) How much were his monthly payments? b) If he sold the house for $750,000 after 5 years, how much equity did he have in the house? c) How much is his contribution to his loan (Principal and Interest)?

Suppose that the daily simple returns of a stock in one week were -0.4%, 0.8%, 1.3%, -1.5%, and 0.9%. What are the corresponding daily log returns? What is the weekly simple return of the stock?

Please refer to the information for Celebrity Auto Parts above. What was Celebrity’s EVA in 2017?

Multiple Choice

• −$30 million

• −$360 million

• $765 million

• −$135 million

• None of the options are correct.

Elliot Karlin is a​ 35-year-old bank executive who has just inherited a large sum of money. Having spent several years in the​ bank's investments​ department, he's well aware of the concept of duration and decides to apply it to his bond portfolio. In​ particular, Elliot intends to use $ 1 million of his inheritance to purchase 4 U.S. Treasury​ bonds:

1. An 8.59 %​, ​13-year bond​ that's priced at $ 1,092.14 to yield 7.47 %.

2. A 7.784 %​, ​15-year bond​ that's priced at $ 1023.51 to yield 7.52 %.

3. A​ 20-year stripped Treasury​ (zero coupon)​ that's priced at $ 197.76 to yield 8.27 %.

4. A​ 24-year, 7.49 % bond​ that's priced at $ 965.54 to yield 7.81 %. Note that these bonds are semiannual compounding bonds.

a. Find the duration and the modified duration of each bond.

b. Find the duration of the whole bond portfolio if Elliot puts $ 250,000 into each of the 4 U.S. Treasury bonds.

c. Find the duration of the portfolio if Elliot puts $ 380,000 each into bonds 1 and 3 and $ 120,000 each into bonds 2 and 4.

d. Which portfolio - b or c - should Elliot select if he thinks rates are about to head up and he wants to avoid as much price volatility as​ possible? Explain. From which portfolio does he stand to make more in annual interest​ income? Which portfolio would you​ recommend, and​ why? The duration and modified duration can be calculated using a​ spreadsheet, such as Excel. It gives the precise duration measure because it avoids the​ rounding-off errors, which are inevitable with manual calculations.

Bond​ 1: 13​ years, 8.59 %​, priced to yield 7.47 %.

The duration of this bond is ____ years.  ​

The modified duration of this bond is ____ years.  

Bond​ 2: 15​ years, 7.784 % priced to yield 7.52 %.

The duration of this bond is ____ years. 

The modified duration of this bond is ____ years.  

Bond​ 3: 20​ years, zero​ coupon, priced to yield 8.27 %.

The duration of this bond is ____ years.  

The modified duration of this bond is ____ years.  

Bond​ 4: 24​ years, 7.49 %​, priced to yield 7.81 %.

The duration of this bond is ____ years.  ​

The modified duration of this bond is _____ years.  ​

b. Find the duration of the whole bond portfolio if Elliot puts $ 250,000 into each of the 4 U.S. Treasury bonds.

The duration of this portfolio is ____ years.  

c. Find the duration of the portfolio if Elliot puts $ 380,000 each into bonds 1 and 3 and $ 120,000 each into bonds 2 and 4.

The duration of this portfolio is ____ years.  ​

d. Which portfolio - the portfolio in part b or the portfolio in part c - should Elliot select if he thinks rates are about to head up and he wants to avoid as much price volatility as​ possible?  ​(Choose the best answer​ below.)

A. He should invest in the portfolio in part b. The portfolio in part c has a higher duration than the portfolio in part b. If rates are about to​ rise, then it is safer to invest in the portfolio in part b​, because it would be less price volatile than the other portfolio.

B. He should invest in either portfolio. The portfolio in part c has a higher duration than the portfolio part b. If rates are about to​ rise, then it is equally safe to invest in either​ portfolio, because both portfolios would be equally price volatile.

C. He should invest in the portfolio in part c. The portfolio in part b has a higher duration than the portfolio in part c. If rates are about to​ rise, then it is safer to invest in the portfolio in part c​, because it would be less price volatile than the other portfolio.

D. He should invest in the portfolio in part c. The portfolio in part c has a higher duration than the portfolio in part b. If rates are about to​ rise, then it is riskier to invest in the portfolio in part b​, because it would be more price volatile than the other portfolio.

Please explain how to calculate in excel....

A = Annual

1. Compute the continuously compounded yields of these five bonds.
2. Compute the continuously compounded zero rates for maturities of 1,2,3,4, and 5 years.

1) Explain what debt investments are investment grade. What rate of return would you expect on investment grade debt versus other non-investment grade debt (and why)?

2) Explain the difference between constant dividend growth and supernatural dividend growth.

1. Why do you think investors want to own stocks instead of bonds, besides the opportunities to earn superior returns? Write 100 words.

2. What preference do you have regarding owning stocks vs. bonds? Why do you have that preference? Write 100 words.

3. How many different stocks and or bonds do you own? Do you have a diversified portfolio? Write 100 words.

Please write in your own words. Please write appropriate answers and don't copy them from anywhere. Thank you!

You have estimated that the annual expected return on Apple stock is 15% and that Apple’s standard deviation is 20%. The Treasury bill rate is 1%. You are considering an asset allocation between T-bills and Apple stock and given your risk preferences and investment objectives, you seek to establish a portfolio with an expected return of 8%.

27. In relation to the problem above, what proportion of your portfolio should you allocate to Apple stock (rounding to the nearest whole percent)?

a. 20%

b. 40%

c. 50%

d. none of the above.

28. In relation to the problem above, what will be the variance on your portfolio?

(a) 0.01

(b) 0.04

(c) 0.08

(d) 0.1

(e) 0.15

Complete b-e and show explanations

You are looking to purchase a $10,000 bond issued by Mexico in USD. It pays $500 annually and matures exactly 10 years from now.

A) What is Mexico’s current long term foreign currency credit rating by S&P? AA-

B) How much would you pay for this bond?

C) What rate did you use to make the calculation?

D) Why did you choose the rate?

bond valuation assume the following information for an existing bong that provides annual coupon payments: par value= $1,000 coupon rate= 11% maturity= 4 years required rate of return by investors= 11% a). what is the present value of the bond? b). if the required rate of return by investors were 14 percent instead of 11 percent, what would be the present value of the bond? c). if the required rate of return by investors were 9 percent, what would be the present value of the bond?

Miles Hardware has an annual cash dividend policy that raises the dividend each year by 10​%. Last​ year's dividend, Div 0​, was $ 1.50 per share. Investors want a return of 17% on this stock. What is the​ stock's price if a.  the company will be in business for 10 years and not have a liquidating​ dividend? b.  the company will be in business for 20 years and not have a liquidating​ dividend? c.  the company will be in business for 30 years and not have a liquidating​ dividend? d.  the company will be in business for 45 years and not have a liquidating​ dividend? e.  the company will be in business for 90 years and not have a liquidating​ dividend? f.   the company will be in business​ forever? a.  What is the price of this stock if the company will be in business for 10 years and not have a liquidating​ dividend?

You are ready to buy a house and you have $85,000 for a down payment and closing costs. Closing costs are estimated to be 3.5% of the loan value. You have an annual salary of $125,000. The bank is willing to allow your monthly mortgage payment to be equal to 28% of your monthly income. The interest rate on the loan is 4.5% per year with monthly compounding for a 30-year fixed rate loan. How much money will the bank loan you? How much can you offer for the house? Construct a loan amortization table for the mortgage. Please submit the actual Excel spreadsheet with formulas embedded in the spreadsheet.

Midland Petroleum is holding a stockholders’ meeting next month. Ms. Ramsey is the president of the company and has the support of the existing board of directors. All 14 members of the board are up for reelection. Mr. Clark is a dissident stockholder. He controls proxies for 30,001 shares. Ms. Ramsey and her friends on the board control 50,001 shares. Other stockholders, whose loyalties are unknown, will be voting the remaining 28,998 shares. The company uses cumulative voting.
a. How many directors can Mr. Clark be sure of electing? (Do not round intermediate calculations. Round down your answer to the nearest whole number.)

Number of directors ___

b. How many directors can Ms. Ramsey and her friends be sure of electing? (Do not round intermediate calculations. Round down your answer to the nearest whole number.)

Number of directors ___

c-1. How many directors could Mr. Clark elect if he obtains all the proxies for the uncommitted votes? (Do not round intermediate calculations. Round down your answer to the nearest whole number.)

Number of directors ___

c-2. Will he control the board?

• Yes

• No

d. If ten directors were to be elected, and Ms. Ramsey and her friends had 58,001 shares and Mr. Clark had 38,001 shares plus half the uncommitted votes, how many directors could Mr. Clark elect? Assume the same number of total shares as the original question. (Do not round intermediate calculations. Round down your answer to the nearest whole number.)

number of directors _____

1. If an investor borrows money to invest in risky portfolio, where will the combination portfolio (the leveraged portfolio) be positioned?

a. Above the CAL

b. Below the CAL

c. On the CAL to the left of risky portfolio

d. On the CAL to the right of risky portfolio

2. An investor’s utility function for expected return and risk is U = E(r)−4σ^2. Which of the following would this investor prefer to invest in?

a. a risk-free security offering a return of 8 percent per year

b. a risky portfolio with expected return of 14 percent per year and standard deviation of 25 percent per year

3. Cathy Chu has $10,000 in a savings account that guarantees her a return of 5% per year. Cathy was offered an investment opportunity that has an expected return of 5% but possible returns range from −30% to 40%. Cathy declined the investment opportunity in favor of her savings account. Cathy is

a. risk adverse

b. risk avoider

c. risk intolerant

d. risk averse