Question

In: Finance

1) A football player has the following new contracts options. All are guaranteed. If the discount...

1)

A football player has the following new contracts options. All are guaranteed. If the discount rate is 7% how much is each worth today? Which do you think is the best option? Why?

  1. A yearly contract for $10 million per year for each of the next 4 years.
  2. A yearly contract for $5 million per year for each of the next 8 years.
  3. A yearly contract which pays $5 million the first year, $10 million the second year, $20 million the third year, and $15 million the fourth year.
  4. A back-loaded contract of $45 million paid at the end of 4 years.
  5. A back-loaded contract of $55 million paid at the end of 8 years.
  6. A front-loaded contract of $35 million paid today.

Solutions

Expert Solution

jeff jeffy answered 1 year ago
Next > < Previous

Related Solutions

You have the following information about forward and options contracts on the same stock. All derivatives...
You have the following information about forward and options contracts on the same stock. All derivatives have one-year maturity. Risk-free rate is 10%. S0 = $45.25, F0,1 = %50, CK=45 = $7.70, CK=45 = $5.40, PK=45 = $3.20, and PK=50 = $5.40. What is the profit if you hedge a short position of the stock with a 45-strike call if the stock price at maturity is $47?
Harvey Alexander, an all-league professional football player, has just declared free agency. Two teams, the San...
Harvey Alexander, an all-league professional football player, has just declared free agency. Two teams, the San Francisco 49ers and the Dallas Cowboys, have made Harvey the following offers to obtain his services: 49ers: $1 million signing bonus payable immediately and an annual salary of $1.5 million for the five-year term of the contract. Cowboys: $2.5 million signing bonus payable immediately and an annual salary of $1 million for the five-year term of the contract. With both contracts, the annual salary...
1. (a) A football club is considering buying a player on 1 January for K10 million....
1. (a) A football club is considering buying a player on 1 January for K10 million. The player's wages will be K20,000 per month higher than those of the man he will replace. The manager expects the purchase to generate a level increase in atten- dances, which will yield an extra income in the rst year of K100,000 from each home match. The manager also expects the new player to increase the club's chance of reaching the Cup Final in...
QUESTION 2 A Ghanaian football player has recently been approached by 5 top football clubs from...
QUESTION 2 A Ghanaian football player has recently been approached by 5 top football clubs from Europe offering to sign him on. All five clubs are offering enticing packages to this youngster who excelled in a just ended tournament. A summary of the clubs and their offers are shown below: i. Bologna F.C. based in Italy offers to pay €200,000 every year over the contract period ii. FK Zalgiris based in Lithuania proposes a total package of €1,050,000 at the...
A Ghanaian football player has recently been approached by 5 top football clubs from Europe offering...
A Ghanaian football player has recently been approached by 5 top football clubs from Europe offering to sign him on. All five clubs are offering enticing packages to this youngster who excelled Acid T est Ratio Total Debt ratio Debt/Equity Ratio (approximated) Gross profit margin Operating Income margin Inventory turnover Period Trade Payable Period EPS Interest cover ratio in a i. ii. iii. iv. v. The that just ended tournament. A summary of the clubs and their offers are shown...
A Ghanaian football player has recently been approached by 5 top football clubs from Europe offering...
A Ghanaian football player has recently been approached by 5 top football clubs from Europe offering to sign him on. All five clubs are offering enticing packages to this youngster who excelled in a just ended tournament. A summary of the clubs and their offers are shown below: i. Bologna F.C. based in Italy offers to pay €200,000 every year over the contract period ii. FK Zalgiris based in Lithuania proposes a total package of €1,050,000 at the end of...
A Ghanaian football player has recently been approached by 5 top football clubs from Europe offering...
A Ghanaian football player has recently been approached by 5 top football clubs from Europe offering to sign him on. All five clubs are offering enticing packages to this youngster who excelled in a i. ii. iii. iv. v. The that just ended tournament. A summary of the clubs and their offers are shown below: Bologna F.C. based in Italy offers to pay €200,000 every year over the contract period FK Zalgiris based in Lithuania proposes a total package of...
QUESTION 2 A Ghanaian football player has recently been approached by 5 top football clubs from...
QUESTION 2 A Ghanaian football player has recently been approached by 5 top football clubs from Europe offering to sign him on. All five clubs are offering enticing packages to this youngster who excelled in a just ended tournament. A summary of the clubs and their offers are shown below: i. Bologna F.C. based in Italy offers to pay €200,000 every year over the contract period ii. FK Zalgiris based in Lithuania proposes a total package of €1,050,000 at the...
Oil swaps , future , options are all examples of oil derivatives contracts . explain the...
Oil swaps , future , options are all examples of oil derivatives contracts . explain the difference and how these can be used in price risk management, and give examples . please this an update of the previous one send .
The local community is considering two options to raise money to finance a new football stadium....
The local community is considering two options to raise money to finance a new football stadium. The first option is to institute a per unit tax on restaurant meals of $2.00. The market demand and supply functions for restaurant meals are: QD=80,000 -1000P QS=19,000P - 220,000 Round to the nearest whole number; no decimals, commas, or dollar signs. a) Calculate consumer  and producer surplus with the per unit tax. The second option the community is considering implementing is an income tax....
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT