Here are some data on DCRB options as of May 14. Current stock price is $125.94, expirations are May 21, June 18, and July 16, and the risk-free rates are 0.0447, 0.0446, and 0.0453 respectively.

                                                          CALLS                                                                          PUTS

Draw a payoff diagram, and calculate the maximum loss, maximum gain, and breakeven for each of the following strategies.

Question 1: A call bull spread strategy: long the June 125 and short the June 130 calls.

Question 2: A put bear spread: long the June 130 put and short the June 125 put.

Question 3: Buy the stock at $125.94, buy the July 120 put for $13.65, and sell a call that has the same price, $13.65. But no such call exists! It turns out that I can “create” such a call if its exercise price were $136.165.    [Hint: this is a collar.]

A firm with a 14% WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows: 0 1 2 3 4 5 Project M -$6,000 $2,000 $2,000 $2,000 $2,000 $2,000 Project N -$18,000 $5,600 $5,600 $5,600 $5,600 $5,600 Calculate NPV for each project. Round your answers to the nearest cent. Do not round your intermediate calculations. Project M $ Project N $ Calculate IRR for each project. Round your answers to two decimal places. Do not round your intermediate calculations. Project M % Project N % Calculate MIRR for each project. Round your answers to two decimal places. Do not round your intermediate calculations. Project M % Project N % Calculate payback for each project. Round your answers to two decimal places. Do not round your intermediate calculations. Project M years Project N years Calculate discounted payback for each project. Round your answers to two decimal places. Do not round your intermediate calculations. Project M years Project N years Assuming the projects are independent, which one(s) would you recommend? If the projects are mutually exclusive, which would you recommend? Notice that the projects have the same cash flow timing pattern. Why is there a conflict between NPV and IRR?

Describe the competitive forces in the Walt Disney company industry, provide 2 competitors including the company's relative advantages and disadvantages to its competitors, can you provide a buy or sell recommendation and estimated price target. for the Walt Disney company

The Walt Disney company’s intrinsic value for 2018 using the discount valuation techniques

Calculate the Intrinsic Value of The Walt Disney Company:

You will use the Discounted Cash Flow (DCF) valuation model to calculate the intrinsic value of the Walt Disney company. This model involves three primary steps: i) calculating the company's cost of capital, ii) calculating the free cash flows to the firm, and ii) applying the time-value-of-money concept to discount your projected cash flow values back to the present using the company's cost of capital as the discount rate.

Calculating the Cost of Capital:

The company's cost of capital can be calculated using the Weighted Average Cost of Capital (WACC) formula:

WACC = D/V * eD *(1-Tc) + E/V * rE

Using the website, ThatsWACC (www.thatswacc.com), enter your company's "ticker symbol", identify the relevant terms from above and calculate the WACC (please show your calculations).

Calculating Free Cash Flow to the Firm:

Estimate the free cash flows available to the firm ("FCFF"). To do this we can use the below formula:

FCFF = Cash Flow from Operations - Capital Expenditures + Interest * (1 - Tax Rate)

The Cash Flow from Operations and Capital Expenditures can be found on the Statement of Cash Flows in Yahoo! Finance.

The Interest expense (if any exists) is on the Income Statement.

The Tax Rate is the one you used to calculate the WACC, above.

For additional details on these calculations please refer to this external resource.

Calculating Firm Value:

You can now combine the two items above to estimate a present value of the firm. To simplify this calculation you should assume a constant growth rate of 3% in the Free Cash Flows to the Firm and apply the constant growth model:

Firm Value = FCFF * (1+g) / (WACC - g)

Please solve this case problem:

SunLife insurance has been trying to penetrate the mass market and educate them on the benefits and importance of life and other investment insurance. They have used several TV personalities like Charo Santos and Piolo Pascual to penetrate the segment, with limited success. People are aware of the brand, but are still not taking insurance due to various issues like affordability and distribution. Use the Ansoff Matrix and recommend how they can expand their market with an incremental 5 million heads by penetrating a new customer segment.

How are "Interest Rate Swaps" used by corporations and banks to hedged risks?

Q: The bond equivalent yield on a T-bill matures in 45 days, priced at $99.00 with a $100 face value, is ____:

A: BEY = 1.01% * 8.111 = 8.19%

Above is the question and the solution but, I am confused about how they came to this solution. I'm not sure where the 1.01% or 8.111 came from?? Any help would be appreciated!

Are Swaps optimal for risk transfer for banks and local governments Why or Why not?

Q1

a)

Given the following cashflows for Project Omega, what is the payback period in years assuming the cashflows occur annually?

b)

Project X and Y. The following are the cash flows of two projects:

If the discount rate is 18% is the project with the highest profitability index also the one with the highest NPV?

Yes

No

c)

he cashflows for an investment in Factory X are listed below. Using the discounted payback method of capital budgeting, what is the payback period for this investment expressed in years, assuming that the cashflows occur annually and using a discount rate of 20%.  

A bond with exactly five years until maturity paying 6% p.a. coupons semi-annually and with a face value of $100 was purchased at a yield of 6.5% p.a. The bond was sold exactly two years later for a yield of 5% p.a. All coupons were reinvested at 6% p.a. Calculate the realised yield-to-maturity on this bond.A bond with exactly five years until maturity paying 6% p.a. coupons semi-annually and with a face value of $100 was purchased at a yield of 6.5% p.a. The bond was sold exactly two years later for a yield of 5% p.a. All coupons were reinvested at 6% p.a. Calculate the realised yield-to-maturity on this bond.

What considerations should a firm make when pricing their goods/services?

Evaluate the following projects using the payback method assuming a rule of 3 years for payback.

General Electric has just issued a callable​ (at par)​ 10-year, 5.7 % coupon bond with annual coupon payments. The bond can be called at par in one year or anytime thereafter on a coupon payment date. It has a price of $ 101.87. a. What is the​ bond's yield to​ maturity? b. What is its yield to​ call? c. What is its yield to​ worst?

Suppose you opened a new account and invested $10,000 in your asset in the beginning of 2014, that on June 30, 2016 you invested an additional $5,000, and that on January 31, 2017 you withdrew $2,000.  

If there were no other cash flows coming into or out of the account, what was the dollar balance at the end of 2018 (yes, do include the effect of the return earned during December 2018)?

Rate of return -0.88

New-Project Analysis

The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $920,000, and it would cost another $19,000 to install it. The machine falls into the MACRS 3-year class (the applicable MACRS depreciation rates are 33.33%, 44.45%, 14.81%, and 7.41%), and it would be sold after 3 years for $630,000. The machine would require an increase in net working capital (inventory) of $18,000. The sprayer would not change revenues, but it is expected to save the firm $416,000 per year in before-tax operating costs, mainly labor. Campbell's marginal tax rate is 30%.

1. What is the Year 0 net cash flow?
   $
2. What are the net operating cash flows in Years 1, 2, and 3? Do not round intermediate calculations. Round your answers to the nearest dollar.

   Year 1	$
   Year 2	$
   Year 3	$

3. What is the additional Year 3 cash flow (i.e, the after-tax salvage and the return of working capital)? Do not round intermediate calculations. Round your answer to the nearest dollar.
   $
4. If the project's cost of capital is 10 %, what is the NPV of the project? Do not round intermediate calculations. Round your answer to the nearest dollar.
   $
   
   Should the machine be purchased?
   y/n