You would like to borrow $245,000 using a 30-year, 1-year ARM indexed to the 1- year Treasury security with a 2.75 percent margin and 2/6 caps (2 percent per year and 6 percent lifetime). The initial interest rate on this loan is 2.75 percent. The lender is charging you 1.50 points and $1,200 in miscellaneous fees to close the loan.
a) What is the initial payment on this mortgage?
b) If the 1-year Treasury security is yielding 2.25 percent at the first adjustment date, what is your payment on this loan during the second year?
c) Suppose that the 1-year Treasury is yielding 2.75 percent at the second adjustment date. What is the new payment on this loan during the third year?
d) Assuming that you pay of the loan at the end of the third year, what yield did the lender earn on this loan?
In: Finance
XYZ's stock price and dividend history are as follows:
| Year | Beginning-of-Year Price | Dividend Paid at Year-End | |||||||||
| 2016 | $ | 100 | $ | 4 | |||||||
| 2017 | 120 | 4 | |||||||||
| 2018 | 90 | 4 | |||||||||
| 2019 | 100 | 4 | |||||||||
An investor buys three shares of XYZ at the beginning of 2016, buys another two shares at the beginning of 2017, sells one share at the beginning of 2018, and sells all four remaining shares at the beginning of 2019.
a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Round your year-by-year rates of return and final answer to 2 decimal places. Do not round other calculations.)
b. What is the dollar-weighted rate of return? (Hint: Carefully prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2016, to January 1, 2019. If your calculator cannot calculate internal rate of return, you will have to use trial and error.) (Round your answers to 4 decimal places. Negative amount should be indicated by a minus sign.)
In: Finance
XYZ stock price and dividend history are as follows: Year Beginning-of-Year Price Dividend Paid at Year-End 2015 $ 130 $ 5 2016 144 5 2017 120 5 2018 125 5 An investor buys six shares of XYZ at the beginning of 2015, buys another three shares at the beginning of 2016, sells one share at the beginning of 2017, and sells all eight remaining shares at the beginning of 2018. a. What are the arithmetic and geometric average time-weighted rates of return for the investor? Prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2015, to January 1, 2018. What is the dollar-weighted rate of return? (Hint: If your calculator cannot calculate internal rate of return, you will have to use a spreadsheet or trial and error.)
In: Finance
A 30-year annuity will pay $10,000 per year, beginning a year from today (i.e., t=1). If the interest rate is 6% per year, compounded annually, for the first 15 years and 8% per year, compounded annually, for the subsequent 15 years, what is the present value of the annuity at t=0? What is the future value of the annuity at t=30?
In: Finance
you are given the following time line year 1 +2,000 year 2 +2,000 year 3 +2000 year 4 +500 year 5 +500 year 6 +500 what is the value of the cash flow stream today if the discount rate is 16%?
In: Finance
XYZ stock price and dividend history are as follows:
Year Beginning-of-year Price Dividend paid at Year-End
2010 $100 $4
2011 $110 $4
2012 $90 $4
2013 $95 $4
Compute the standard deviation of stock return.
In: Finance
The Hill Company reported the following results:
| Year 3 | Year 2 | Year 1 | |||
| Income Statement | |||||
| Revenue | 10,972 | 11,598 | 10,470 | ||
| Cost of Goods Sold | 8,942 | 8,767 | 7,901 | ||
| Selling, General & Admin. Expenses | 2,470 | 2,611 | 2,479 | ||
| Interest expense | 76 | 80 | 28 | ||
| Net Income | (516) | 140 | 62 | ||
| Balance Sheet | |||||
| Assets | |||||
| Cash | 1,354 | 1,316 | 1,880 | ||
| Prepaid expenses | 202 | 522 | 125 | ||
| Accounts receivable | 375 | 250 | 231 | ||
| Inventory | 745 | 698 | 455 | ||
| Property & equipment (net) | 20,464 | 18,810 | 17,727 | ||
| Total Assets | 23,140 | 21,596 | 20,418 | ||
| Liabilities | |||||
| Accounts payable | 2,824 | 743 | 678 | ||
| Unredeemed gift cards | 410 | 850 | 636 | ||
| Notes Payable | 15,457 | 18,048 | 17,024 | ||
| Stockholders' Equity | |||||
| Common Stock | 985 | 545 | 815 | ||
| Retained Earnings | 3,464 | 1,410 | 1,265 | ||
| Total Liabilities & Equity | 23,140 | 21,596 | 20,418 |
1.What is the company's debt ratio for Year 1? Convert your final answer to a percentage, round to one decimal place and enter without the "%" sign (e.g. a final answer of 0.105678 would be entered as 10.6).
2. What is the company's gross profit ratio for Year 3? Convert your final answer to a percentage, round to one decimal place and enter without the "%" sign (e.g. a final answer of 0.105678 would be entered as 10.6).
3.What is the company's net profit ratio for Year 2? Convert your final answer to a percentage, round to one decimal place and enter without the "%" sign (e.g. a final answer of 0.105678 would be entered as 10.6).
4. What is the company's return on investment ratio for Year 1? Convert your final answer to a percentage, round to one decimal place and enter without the "%" sign (e.g. a final answer of 0.105678 would be entered as 10.6)
5. Based on the three years of data, the company's return on investment ratio has
A. improved
B. worsened.
C. stayed the same.
In: Accounting
A real estate investment has the following expected cash flows:
|
Year 0 |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
|
|
Cashflow |
10,000 |
25,000 |
50,000 |
35,000 |
The discount rate is 9%. What is the investment’s value 4 years
from now?
Select one:
a. $ 132,152
b. $103,700
c. $ 113,345
d. $120,000
e. $130,757
In: Finance
Consider the following project:
| Machine A ($10,000) | |
| Inflows | |
| Year 1 | $4,500 |
| Year 2 | 4,500 |
| Year 3 | 4,500 |
The IRR for this project is (Write your answer with 2 decimal and as a percentage):
（ ？ ）Given that the firm's cost of capital is 12%, the MIRR for this project is (Write your answer with 2 decimal and as a percentage) （ ？ ）
In: Finance
The 1-year spot rate is 8%, the 2-year spot-rate is 7%, and the 3-year spot rate is 6%. What is the YTM on a 3-year, 1% annual coupon bond?
In: Finance