10. The Metallica Heavy Metal Mining (MHMM) Corporation wants to diversify its operations. Some recent financial information for the company is shown here:

Stock Price $75

Number of shares 64,000

Total assets $9,400,000

Total liabilities $4,100,000

Net income $980,000

MHMM is considering an investment that has the same PE ration as the firm. The cost of the investment is $1.5 million, and it will be financed with a new equity issue The return on the investment will equal MHMM's current ROE. What will happen to the book value per share, and the EPS? What is the NPV of this investment? Does dilution take place?

11. In problem 10, what would the ROE on the investment have to be if we wanted the price after the offering to be $75 per share?(Assume the PE ration remains constant.) What is the NPV investment? Does any dilution take place?

What is the accumulated sum of the following stream of payments? $1,938 every year at the end of the year for 8 years at 5.51 percent, compounded annually.

You have been offered the opportunity to invest in a project that will pay $2,526 per year at the end of years one through three and $10,052 per year at the end of years four and five. If the appropriate discount rate is 12.2 percent per year, what is the present value of this cash flow pattern?

If the price of your bond is currently worth $1,030, has a maturity of twelve years with semiannual payments, what is the YTM if the coupon rate is 5%?

Q7: Show the Portfolio Standard Deviation (equation). Say for total returns on assets in a stock portfolio. Show equations!

--What would LOW covariance between stocks in the portfolio have on the portfolio standard deviation? Q8: What is the value of using regression techniques? Show Time-Series Forecast Regression Equation/Definition: 5 Variable Model!

--What is and how would you use, in analyzing stocks or companies: Show Equations:

--Cross-Sectional Regression:

--Time-Series Regression (Forecasting)

Q9: What is the difference between un-systematic and systematic risk? Show graph! Give Examples.

Unsystematic Risk: Systematic Risk:

Graph:

--What type of risk can be diversified away? How would you do this? What statistical measures would you have to look at? Explain!

(IRR calculation​) Determine the IRR on the following​ projects:

a. An initial outlay of $10,000 resulting in a single free cash flow of $16,863 after 7 years

b. An initial outlay of ​$10,000 resulting in a single free cash flow of $50,003 after 14 years

c. An initial outlay of ​$10,000 resulting in a single free cash flow of $114,691 after 23 years

d. An initial outlay of $10,000 resulting in a single free cash flow of ​$14,283 after 3 years

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Q10: Show an example of a Corporate Balance Sheet:

Assets Liabilities

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Q14: Show Four (4) Intrinsic Valuation Methods for the following (Equations/Definitions): Give and Example!!!

Perpetuity Model:

Equation:

Example:

Gordon Growth:

Equation:

Example:

Multiple (P/E) Approach:

Equation:

Example:

Q13: Show Calculations/Definitions for the following Financial Ratios/Equations: Price-to-Earning (P/E) Ratio:

Earnings Per Share (EPS):

Weighted Average Cost of Capital (WACC):

Capital Asset Pricing Model (CAPM):

Q6: What is the Correlation Coefficient (Say between two stock returns over time)? How do standard deviations and covariance interact in this equation (show equation)? What is the correlation between stocks/bond market returns, and inflation/inflation expectations/interest rates over time? What does a -1, 0, and +1 correlation mean? Show Equation/Definition!!! and answer all questions!

(NPV with varying required rates of return​) Gubanich Sportswear is considering building a new factory to produce aluminum baseball bats. This project would require an initial cash outlay of ​$4,000,000 and would generate annual free cash inflows of ​$1,000,000 per year for 7 years. Calculate the​ project's NPV ​given:

a. A required rate of return of 9 percent

b. A required rate of return of 11 percent

c. A required rate of return of 15 percent

d. A required rate of return of 16 percent

Q5: What is Covariance between variables (say return between stocks over time)? (Show equation) What does this measure? What if you had high, medium or low covariance between stock returns? What does this tell you and what are the implications? Show Equation/Definition!!, answer all questions.