Scott secured a 5-year car lease at 6.20% compounded annually
that required him to make payments...
Scott secured a 5-year car lease at 6.20% compounded annually
that required him to make payments of $881.83 at the beginning of
each month. Calculate the cost of the car if he made a downpayment
of $3,000.
Interest is compounded annually unless stated otherwise.
Payments are at the end of the year unless stated otherwise. All
bonds have a face value of $1000. Taxes are 0 unless specified
otherwise.
2. A project has a beta of 1.3. The risk-free return is 2% and
the return on the market is 12%. The project has an IRR of 14%.
a) If the firm’s cost of capital is 10%, will they take the
project using the cost of capital?
b)...
Interest is compounded annually unless stated otherwise.
Payments are at the end of the year unless stated otherwise. All
bonds have a face value of $1000. Taxes are 0 unless specified
otherwise.
Use the following information to estimate the weights for the
cost of capital equation for STANCO:
From the balance sheet: Assets = 800M. Debt = 200M and Equity =
600M
The firm has 20M shares outstanding that trade for $50 per
share. The market value of the debt...
Interest is compounded annually unless stated otherwise.
Payments are at the end of the year unless stated otherwise. All
bonds have a face value of $1000.
3. Lettuce Unite expects free cash flows of $10B next year,
growing by 15% until year 2. After year 2, the growth rate falls to
4%. The cost of capital is 14%. They have $2B in cash and
marketable securities and $25B in debt. There are 8B shares
outstanding. Find the share price.
A company borrowed at 4.63%compounded semi-annually to purchase
equipment, agreeing to make payments of $2,140 at the end of every
three months for 13 payments.
(a) What is the equivalent cash price of the equipment?
(b) How much will be owed at the end of two years?
(c) How much of the principal will be repaid within the first
two years?
(d) How much interest is paid during the first two years?
(a) The cash price of the equipment is...
A
20-year, $ 490,000 mortgage at 4.20\% compounded annually is repaid
wit monthly payments . a. What is the size of the monthly payments
? Round to the nearest cent. b. Find the balance of the mortgage at
the end of 5 years 00 Round to the nearest cent c. By how much did
the amortization period shorten by if the monthly payments are
increased by $ 200 at the end of year five
A loan of $27,150.00 at 5.00% compounded semi-annually is to be
repaid with payments at the end of every 6 months. The loan was
settled in 4 years.
a. Calculate the size of the periodic
payment.
$3,406.15
$4,200.70
$3,786.54
$4,276.00
b. Calculate the total interest paid.
$3,142.32
$30,292.32
-$644.22
$6,928.86
A 25-year, $455,000 mortgage at 4.30% compounded semi-annually
is repaid with monthly payments.
a. What is the size of the monthly
payments?
b. Find the balance of the mortgage at the end
of 6 years?
c. By how much did the amortization period
shorten by if the monthly payments are increased by $275 at the end
of year six?
1) The company holds a 6-year loan of $230 000, at 7.5%
compounded annually. Payments are made quarterly. After 15 months,
the terms of the loan are renegotiated at 5.5%, compounded monthly
with monthly payments for the remainder of the 6-year term.
a. Calculate the payment amount for the original loan.
b. Calculate the accumulated value of the original loan principal
after 15 months.
c. Assuming that payments had been made, calculate the accumulated
value of the payments made in...
A company must make payments of $10 annually in the form of a
10- year annuity- immediate. It plans to buy two zero coupon bonds
to fund these payments. The first bond matures in 2 years and the
second bond matures in 9 years, and both are purchased to yield 10%
effective. What face amount of each bond should the company buy in
order to be immunized from small changes in the interest rate
(redington immunization)?
A company must make payments of $10 annually in the form of a
10- year annuity- immediate. It plans to buy two zero coupon bonds
to fund these payments. The first bond matures in 2 years and the
second bond matures in 9 years, and both are purchased to yield 10%
effective. What face amount of each bond should the company buy in
order to be immunized from small changes in the interest rate
(redington immunization)?