IBM just paid a dividend of $1.6 per share. You expect IBM's dividend to grow at a rate of 9%

per year for the next three years, and then you expect constant dividend growth of 4% forever.

Based on the risk of IBM stock, you require a return of 13%. Using the dividend discount model,

what is the value of IBM stock?

Why might a student who is claimed as a dependent on another person's tax filing (e.g. that of their spouse or their parents) be prohibited from taking the student loan interest deduction? If the student is permitted to take the deduction on their tax filing, why might the deductible amount be reduced depending on the student's Modified AGI?

Chapter 3 Homework

You are considering an investment in the common stock of Target (Ticker: TGT). Calculate the missing ratios (Current Ratio, Debt Ratio, and Profit Margin). Discuss the company’s strengths and weakness in the areas of liquidity, asset management, debt management and profitability relative to the competitor, Walmart Inc. (Ticker: WMT). Summarized Financial Data and Ratios from Hoovers.

Target: 2017 Annual Balance Sheet (In Millions)

Target: 2017 Income Statement (In Millions)

Stock C is expected to pay a dividend of $5.80 next year. Thereafter, dividend growth is expected to be 19.00% a year for five years (i.e., years 2 through 6) and zero thereafter.

If the market capitalization rate for each stock is 9.00%, what is the stock price for each of the stock C?

Why is a home a good inflation hedge? Should a home be included as an asset if its occupants aren’t sure they could sell it?

Please discuss the independence of the Fed.

How do you resolve unethical bussiness behavior at a beer distribution company you work at and what would be your recommendations to management to deal with these issues.

The rate of return on Cherry Jalopies, Inc., stock over the last five years was 15 percent, 11 percent, -1 percent, 4 percent, and 13 percent. Over the same period, the return on Straw Construction Company’s stock was 16 percent, 20 percent, -3 percent, 1 percent, and 12 percent.

Calculate the variances and the standard deviations for Cherry and Straw. (Enter variance as a decimal and standard deviation as a percent. Round your variance to 5 decimal places and standard deviation to 2 decimal places. Omit the "%" sign in your response.)

What are the facts involved in Danske Bank's Estonian Branch money laundering activities?

a) Explain the concept of time value of money

b) Distinguish between risk and uncertainty in the context of finance

c) Discuss the objective of working capital management

d) Distinguish between overtrading and overcapiatlisation

e) Distinguish between interest rate risk and currency risk

Submitting your assignment  

1. Please collate your assignment as a single document in a Microsoft Word format.

2. Save the assignment as your candidate ID number, e.g. CON-000123456.

3. All marking is anonymous, which means your name should not appear on your work.

4. You must state which region/jurisdiction you are from in the header of each page.

5. You must ensure that all your work is properly referenced.

6. Penalties will be applied to those candidates who submit their assignment after the due date.

Word count

7. The total word count for this assignment should be between 2,000 and 2,500 words. This includes all in text references and appendices but excludes any footnotes, reference page or contents page. N.B. Appendices should only be used in exceptional circumstances and should consist of only brief extracts or tables.

8. The number of words per question should reflect the number of marks allocated.

9. Penalties will be applied for excessive overall word count.

All parts of the question can be answered in relation to a jurisdiction with which you are familiar.

Where a specific jurisdiction has been selected, this should be clearly stated in your answer.

Answer all parts of the question.

Question

Olivia is a director and money laundering reporting officer (MLRO) of NRO Bank, a small local bank based in a jurisdiction of your choice. She is responsible for a number of areas of the Bank's operations, including the Human Resources division and New Business Acquisition, as well as bearing the AML responsibilities.

Olivia has a strong personality and is trusted by the Bank's board, who rely on her to get things done. She is rarely challenged by other members of the board or other staff members.

The Bank has recently been the subject of a regulatory visit and the report that followed has been highly critical of both the board and the MLRO. Key criticisms included the following failings.

• • A failure on the part of the MLRO to process internal suspicious activity reports (SARs)/suspicious transaction reports (STRs) and externalise them to the Financial Intelligence Unit (FIU) (26 in total, with some as old as 18 months).

• • The MLRO deliberately misled the board into believing that money laundering was not a significant issue within the Bank. She deliberately failed to notify the board that internal SARs had been made.

• • The board of the Bank failed to meet regularly and did not monitor the internal AML reporting system and processes.

• • The MLRO was an extremely powerful individual and deemed unapproachable by members of staff.

• • The Bank prioritised business development over compliance.

• • From a corporate governance perspective, it was inappropriate for Olivia to control so many other areas of the Bank's operations while also carrying out the MLRO role.

Q)What remedial action do you believe the Bank should take in order to remedy the issues highlighted?

The country/jurisdiction to be selected is DUBAI

Question #2:

You own a property on Main Street on which a small, vacant take-out pizza stand sits.  

There are other vacant take-out pizza stands in the same locale (i.e. Main Street) as well as on the less busy Side Street locale.   From your market analysis, you are confident that the sites will attract the following number of pizza sales each month (based on their locale):

Main Street: 450

Side Street:   300

The market price for pizzas in the city is $7.00. You know the cost of running and maintaining a pizza stand (paid by the operator of the business of course) is fixed at $900 per month.

Jobs in another industry which pay $200.00 per month are plentiful in the city and therefore $200.00 is the minimum profit after rent operators must achieve in order for them to run a pizza stand.

Note: If any new assumptions are made, they will continue to be in effect for subsequent questions.

A. What is a potential operator’s monthly profit, before rent, at each of the two locales (Main Street and Side Street)?

Explain with the help of a table.

B. You learn that the Side Street properties are renting for $250 per month on a month-to-month basis. Assume operators can easily (and at no cost) switch from one property to another.

Given that operators can easily setup shop at a Side Street location for $250 per month, how much rent are you able to collect for your Main Street property? Why? Show your work with the help of a table.

C. Seeing how much profit there is to be made in the pizza business (compared to the alternative industry which, as a reminder, pays just $200 per month), would-be pizza stand operators rush to open up new businesses.

With far more be operators in the market than properties available for them, what will the rent for each properties in each of the locales (Main Street and Side Street) eventually stabilize at? Why? Show your work with the help of a table.

D. A local business owner is interested in converting your Main Street pizza stand site into a tanning salon (at no cost to you). The cost of operating the tanning salon is just $400.00. They are confident they’ll attract 80 tanning sessions per month at $25.00 per session.

Will we see a new tanning salon on your site? Why or why not? Show with the help of a table.

E. The evening news reports that demand for pizza is surging in your market. Experts predict that the number of pizzas a Main Street location can sell will double to 900 per month and prices will increase to $10.00 per pizza.

“With monthly profits expected to increase so dramatically, this is a GREAT time to be in the pizza business!” the reporter concludes.

Will the pizza operators at Main Street locations really keep that additional residual profit? Explain why or why not. What business is it really a GREAT time to be in? :-)

Please research and then discuss the aspects of the bankruptcy process. Also, discuss capital structure and how a company's structure impacts its progress through the bankruptcy process.

Required:

Return on Equity (ROE) is used, and some say “abused” when measuring the financial performance of a firm. What are your thoughts on ROE specifically, as well as other financial ratios generally, when forming an opinion on the financial performance of a firm? Write at least 300 words.

Please don't copy from anywhere. Write in your own words.