A sinking fund can be set up in one of two ways. Discuss the
advantages and...
A sinking fund can be set up in one of two ways. Discuss the
advantages and disadvantages of each procedure from the viewpoint
of both the firm and its bondholders.
Linda set up a sinking fund so that can pay off $72,000 in 4
years. she will make semiannual payment at 14% compounded
semiannually payment, at 14% compounded semiannually. in order to
prepare sinking fund table you must first find the amount of the
regular payment. how much is the pmt?
Question 1
A company borrowed $ 74,500. The company plans to set up a
sinking fund that will pay back the loan at the
end of 6 years. Assuming a rate of 6% compounded semiannually, find
the Sinking Fund of the ordinary
annuity.
An employee decided to invest $ 1,960
quarterly for eight years in an ordinary annuity
at 20%. What is the total cash value of the annuity at end of year
8?
What must YOU...
Loan of EGP 50,000 is taken out. A sinking fund is set up to pay
back the EGP 50,000 in one lump sum at the end of 5 years. The
sinking fund earns j2 = 12% and deposits are made semiannually.
Find the book value of the debt after 2 years.
choose
3793.63
16595.67
33404.33
Loan of EGP 30,000 is taken out. A sinking fund is set up to pay
back the EGP 30,000 in one lump sum at the end of 5 years. The
sinking fund earns j4 = 4% and deposits are made Quarterly. Find
the book value of the debt after 3 years.
Discuss the pros and cons of a sinking fund from the viewpoint
of both a firm and its bondholders. Which group do you think would
more in favor of such a provision, and why?
Discuss the pros and cons of a sinking fund from the viewpoint
of both a firm and its bondholders. Which group do you think would
more in favor of such a provision, and why?
A small company wishes to set up a fund that can be used for
technology purchases over the next 6 years. Their forecast is for
$22,000 to be needed at the end of year 1, decreasing by $2,000
each year thereafter. The fund earns 9% per year. How much money
must be deposited to the fund at the end of year 0 to just deplete
the fund after the last withdrawal? $
Discuss the various ways in which MNCs set up, or control,
production in other countries. Support your discussion with
horizontal and vertical integration strategies applied by MNCs.
Define and discuss the followings:
a) YTM vs. HPR
b) Call provision vs. Sinking fund provision
c) Nominal yield, current yield, YTM, and YTC
d) Price-yield relationship
e) How to annualize a bi-weekly return?
f) Bond Duration and types of Duration
g) Features of Macaulay’s Duration Measure
h) Term Structure of Interest Rate and Term Structure Theory
i) Convexity of a Bond
j) Convexity of a Callable Bond[hint: see RB textbook]
k) Immunization Strategy
l) Zero-coupon bond vs. Perpetuity and...