• Analyze three online trading sites, and determine the requirements for trading, including the price per trade.
• Evaluate the amortization schedule you completed. What role does the amortization schedule play in your organization?
• Evaluate three companies (look for investor information) that offer DIPs or DRIPs. Why is the relevant?
• Evaluate US Treasuries, Municipal Bonds, and Corporate Bonds. Why is this relevant to an organization

You are considering investing in a company that cultivates abalone for sale to local restaurants. Use the following information: Sales price per abalone = $44.10 Variable costs per abalone = $11.00 Fixed costs per year = $478,000 Depreciation per year = $117,000 Tax rate = 21% The discount rate for the company is 13 percent, the initial investment in equipment is $936,000, and the project’s economic life is 8 years. Assume the equipment is depreciated on a straight-line basis over the project’s life and has no salvage value. a. What is the accounting break-even level for the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the financial break-even level for the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Buying your suppliers is a way of guaranteeing price stability and improving the co-ordination of your value chain. But does it make sense? Consider the ways in which purchasing a supplier represents a form of market failure, and consider the inefficiencies that might arise as a result. . The recommended word count is 300 - 400 words.

You want to buy your dream house by borrowing $300,000 for 15 years, with monthly payments. The bank quotes a fixed rate of 5.5%. What is the total interest you paid by the end of the 5^th year?

Why would you want to invest in a bond over a stock? What are some of the risks associated with investing in bonds?

.  Problem 8.07

You are considering making a movie. The movie is expected to cost $ 10.8 million up front and take a year to produce. After​ that, it is expected to make $ 4.1 million in the year it is released and $ 2.2 million for the following four years. What is the payback period of this​ investment? If you require a payback period of two​ years, will you make the​ movie? Does the movie have positive NPV if the cost of capital is 10.6 %​? What is the payback period of this​ investment?  

The payback period is _____ years. (Round to one decimal​ place.)

If you require a payback period of two​ years, will you make the​ movie? ▼ No Yes . ​(Select from the​ drop-down menu.)

Does the movie have positive NPV if the cost of capital is 10.6 %​? If the cost of capital is 10.6 %​, the NPV is ​$ ____million.​(Round to two decimal​ places.)

a. You have just purchased the options listed below. Based on the information given, indicate whether the option is in the money, out of the money, or at the money, whether you would exercise the option if it were expiring today, what the dollar profit would be, and what the percentage return would be. (Enter “0” if there is no profit or return from not exercising the option. Round your answer to 2 decimal places.)

b. Now suppose that time has passed and the stocks’ prices have changed as indicated in the table below. Recalculate your answers to part a.

FIN322 Corporate Finance Homework Assignment I

Answer All Questions but my professor is picking two random to grade Show all your work (use of formula, etc.) in solving the problems. You still need to show your work even if you use the financial calculator to get the answers.

1. Suppose you wish to plan for your newborn’s college tuition payment. You intend to make equal semiannual deposits into an account offering 4% compounded semiannually on the child’s 3rd through 13th birthdays. You expect that tuition payments will be $50,000 semiannually by the time the child is ready to enter college. Therefore, your goal is to make eight semiannual withdrawals of $50,000 each starting on the child’s 18th birthday, each withdrawal to be used for semiannual tuition. Assume the account continues to offer 4 percent per year compounded semiannually throughout the entire period of deposits and withdrawals. How much must each of the semiannual deposits be such that there will be enough money accumulated in the account to exactly meet the goal? [Suggestion: Draw the cash flow diagram to aid you in solving this problem.]

2. You are planning to save for retirement over the next 40 years. To do this, you will invest $500 per month in a stock account and $2,500 semiannually in a bond account. The return of the stock account is expected to be 6 percent per year, and the bond account will pay 4 percent per year. When you retire, you will combine your money into an account with a 5 percent per year return. How much can you withdraw each month from your account assuming a 25-year withdrawal period?

3. You are taking out a four-year loan of $30,000 from your bank. The interest rate is 5 percent per year, and the loan calls for equal monthly payments. How much principle is paid in the second month? How much total interest is paid after five months? (Draw an amortization table to answer the questions. Use of excel is highly encouraged.)

4. Bond J is a 4 percent coupon bond. Bond K is a 7 percent coupon bond. Both bonds have 10 years to maturity, make semiannual payments, and have a YTM of 6 percent. If interest rate (YTM) changes from 6 percent to 8 percent, what is the percentage price change of these bonds? What if the YTM suddenly falls from 6 percent to 4 percent instead? What does this problem tell you about the interest rate risk of lower-coupon bonds?

5. Rizzi Co. is growing quickly. The company just paid a $2 per share dividend and dividends are expected to grow at a 15%, 8% and 4% rate respectively for the next three years, with the growth rate falling off to a constant 3 percent thereafter. If the required return is 10 percent, what is the current share price?

1. Titan Mining Corporation has 8 million shares of common stock outstanding, 5 million shares of preferred stock outstanding, and 100,000 units of 9 percent semiannual bonds outstanding, par value $1,000 each. The preferred stock pays a dividend of $6 per share. The common stock currently sells for $32 per share and has a beta of 1.15, the preferred stock currently sells for $67 per share, and the bonds have 15 years to maturity and sell for 91 percent of par. The market risk premium is 10 percent, T-bills are yielding 5 percent, and Titan Mining’s tax rate is 35 percent.

1. If Titan Mining is evaluating a new investment project that has the same risk as the firm’s typical project, what rate should the firm use to discount the project’s cash flows?

Answer: Rate of return firm should use in 13.51%

You own a portfolio that has $1,500 invested in Stock A and $500 invested in Stock B. If the expected returns are 10% for Stock A and 14% for Stock B, what is the expected return on the portfolio?

You have just taken out a $15,000 car loan with a 6% APR, compounded monthly. The loan is for five years. When you make your first payment in one​ month, how much of the payment will go toward the principal of the loan and how much will go toward​ interest?  ​(Note: Be careful not to round any intermediate steps less than six decimal​ places.)

When you make your first​ payment,​$___will go toward the principal of the loan and ​$___ will go toward the interest. (Round to the nearest​ cent.)

Suspect Corp. issued a bond with a maturity of 30 years and a semiannual coupon rate of 8 percent 3 years ago. The bond currently sells for 93 percent of its face value. The book value of the debt issue is $50 million. In addition, the company has a second debt issue on the market, a zero coupon bond with 13 years left to maturity; the book value of this issue is $50 million and the bonds sell for 54 percent of par. The company’s tax rate is 35 percent.

What is the company’s total book value of debt? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)

What is the company’s total market value of debt? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)

What is your best estimate of the aftertax cost of debt? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)

A project has the following cash flows: Year Cash Flow 0 $ 42,000 1 – 21,000 2 – 32,000 What is the IRR for this project? (Round your answer to 2 decimal places. (e.g., 32.16)) IRR % What is the NPV of this project, if the required return is 12 percent? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) NPV $ What is the NPV of the project if the required return is 0 percent? (Negative amount should be indicated by a minus sign.) NPV $ What is the NPV of the project if the required return is 24 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) NPV $