Marigold Mechanical Inc.’s first dividend of $1.40 per share is expected to be paid six years from today. From then on, dividends will grow by 10 percent per year for five years. After five years, the growth rate will slow to 5 percent per year in perpetuity. Assume that Marigold’s required rate of return is 16 percent. What is the price of a share of Marigold Mechanical today? (Round present value factor calculations to 5 decimal places, e.g. 1.15612. Round other intermediate calculations to 3 decimal places, e.g. 1.156 and final answer to 2 decimal places, e.g.115.61.)

Global TV implements Varian’s Position Auction for commercial spots during the evening news. The highest bidder is to be awarded the first commercial spot which is known to attract 2000 viewers and the second-highest bidder is to be awarded the second commercial spot which is known to attract only 500 viewers. They use a position auction (GSP) mechanism: the highest bidder will pay a price equal to bid of the second-highest bidder and the second-highest bidder will pay a reserve price of 2 dollars. There are two bidders: Dodge Motor Company who have a valuation of 6 dollars per viewer and Ford Motor Company who have a valuation of 4 dollars per viewer. what is the outcome of this bid?

Imagine that you are a banker getting a loan ready for a client, Jama Hamza. They are buying a 1700 square foot home for the price of $374,500. In order to avoid PMI, Abdi puts 10% of the price as a down payment. He qualifies for 5.68% annual interest rate for a 30 year loan.

Round all answers to the nearest cent.

• Create an amortization table for the first 3 months of the 30 year loan.          
• Jama has asked for ideas that might help him pay the loan off early. As his financial advisor, give two pieces of advice you can give him in order to pay the loan off early. They should be reasonable and not a large financial strain.

Suppose we have a monopolist that faces an inverse demand function and total cost function of

Pd= 200−2Qd

C(Qs)=Qs^2 + 8Qs + 50

Note that the last part of this question asks you to graph much of your answers to the first parts of this question.

(a) Find the profit maximizing level of output (Q) and the corresponding price charged (P).

(b) Find the Socially optimal level of output and price. (hint: this is the case when we assume perfect competition)

(c) Graph the Demand, Marginal Revenue, and Marginal Cost curves. Find the Deadweight Loss, loss to Consumer Surplus and gain to Producer Surplus due to monopolistic power.

DWL =

Loss to CS =

Gain to PS =

The spot term structure for T-Bills (proxy for the risk free rate) is as follows 30-Day T-Bill=7% per annum, 60-Day T-Bill=7.25% per annum, 90-Day T-Bill=7.5% per annum, 180-Day T-Bill=7.65% per annum and the 270-Day T-Bill=7.85% per annum all with continuous compounding. A stock pays $0.5 per quarter as dividends, the first dividend has just been paid and the current stock price is $50. What is the price of a 6-month At-the-Money European Put option on this stock if the volatility is 35%? Assume the year has 360 days.

Explain, with reasons, whether the gain of each scenario are assessable to Malaysian income tax.

Scenario 1: Annette, an entrepreneurs, acquired a bungalow lot costing RM400,000 at Ipoh in 2009, with intention to build a nice home for her family. She utilized her savings to settle the down payment of RM50,000. The balance of the acquisition price was financed by a 25-years bank loan. Since then, her business has not been good and the bungalow lot was left vacant. In 2019, she was approached by a real estate agent to sell the lot with very attractive price. She accepted the offer and sold the lot at a gain of RM170,000. This was her first sale transaction of real property.

SUBJECT: BUSINESS TAXATION

The first step in the forecasting game plan is to project sales and other operating activities. Sales numbers are determined by both a volume component and price component. Projecting prices depends on factors specific to the firm and its industry that might affect demand and price elasticity. For the following types of firms discuss whether it would be likely that the firm would be able to raise future prices:

a. A firm in a capital-intensive industry that is expected to operate near capacity for the near future.

b. A firm in an industry that is expected to experience numerous technological improvements.

c. A firm with products which are transitioning from the growth to maturity phase of the product life cycle.

d. A firm that has established a well-known brand name and image.

The first step in the forecasting game plan is to project sales and other operating activities. Sales numbers are determined by both a volume component and price component. Projecting prices depends on factors specific to the firm and its industry that might affect demand and price elasticity. For the following types of firms, discuss whether it would be likely that the firm would be able to raise future prices:

Problem ABC is a young starup company. Currently, they do not pay dividends. The first scheduled dividend will be paid at the end of year 3, with amount of $1.50. In the next 4 years, the dividend will grow at 20% every year. After that, it will maintain a sustainable growth rate of 6% forever. The required rate of return is 15%. John hired you as an excel programmer. He asks you to write only one flexible excel program that has all of the following requirements respect to the change of input data: a) The amount of stock price must be shown at “answer section” ( 1 point) b) Please use IF function to develop a fexible model displaying the stock price and dividend for this model.

The US economy was hit two shocks at the onset of the 2008 Global Financial crisis. First, it faced a negative supply shock due to a doubling of the price of oil, large price increases in other commodities and the collapse of a domestic housing bubble. Soon after, a negative aggregate demand shock followed, as consumer optimism dropped, while a reduction in credit supply in the financial sector caused firms to cut back on their investment plans.

Using the AS/AD model and assuming that the economy is initially at its long-run equilibrium (where output is equal to Y*), show on a graph what happens in the short-run to inflation and output when the economy is hit by a negative demand shock such as a drop in consumer optimism or firm investment.