SuperOnline is a company composed of two divisions: online commerce and fintech. It is planning to spin off its fintech division. Currently, SuperOnline has 10 million shares of stocks trading at $170. It is unlevered. Online commerce division’s EBIT is expected to be 100 million at the end of this year and grow 2% every year. Fintech division’s EBIT is expected to be 50 million at the end of this year and is expected to grow 7% every year. EasyFintech is SuperOnline’s fintech business rival and it is only in fintech business. EasyFintech’s debt/equity ratio is 25%, its cost of equity is 15%. Assume all debts are riskless. Risk-free rate is 10%. Market Risk premium is 8%. Tax rate is 35%.

(a) What is cost of capital for SuperOnline’s fintech division? (4pt)
(b) What is the fair value (t=0 value) of SuperOnline’s fintech division’s equity? (4pt) (c) What is cost of capital (equity) of SuperOnline’s onlince commerce division? (4pt)

What is the total backorder cost?

Group of answer choices

1. Less than 0

2. Equal to 0

3. Greater than 0

Introduction to Mortgage Mathematics and Mortgage-Backed Securities

I NEED THE SOLUTIONS JUST FOR: 4,5,6,7,8 and 9. Thanks

1.(Level-Payment Mortgages) Compute the monthly payment on a 30-year level payment mortgage assuming an annual mortgage rate of 5% and an initial mortgage principal of $400,000. Submission Guideline: Give your answer rounded to two decimal places. For example, if you compute the answer to be $73.2367, submit 73.24.

2 (Mortgage Pass-Throughs) Consider a $400 million pass-through MBS that has just been created (so the 'seasoning' of the pass-through is equal to 0). The underlying pool of mortgages each has a maturity of 20 years and an annual mortgage coupon rate of 6%. The pass-through rate of the mortgage pool is 5%. Assuming a prepayment multiplier of 100 PSA what is the total amount of interest paid to the pass-through investors? Submission Guideline: Give your answer in millions rounded to two decimal places. For example, if you compute the answer to be $123,456,789,12, submit 123.46.

3 (Mortgage-Pass Throughs) Referring to the same mortgage pass-through of the previous question, what is the total amount of the prepayments? Submission Guideline: Give your answer in millions rounded to two decimal places. For example, if you compute the answer to be $123,456,789,12, submit 123.46.

4 (Mortgage-Pass Throughs) Referring to the same mortgage pass-through of the previous question, what is the total amount of the prepayments if the rate of prepayments increases to 200 PSA? Submission Guideline: Give your answer in millions rounded to two decimal places. For example, if you compute the answer to be $123,456,789,12, submit 123.46.

5 (Principal-Only MBS and Interest-Only MBS) Suppose we construct principal-only (PO) and interest-only (IO) mortgage-backed securities (MBS) using the mortgage pass-through of the previous questions. Assume a prepayment multiplier of 100 PSA. What is the present value of the PO MBS if we use an annual risk-free rate of 4.5% to value the cash-flows? Submission Guideline: Give your answer in millions rounded to two decimal places. For example, if you compute the answer to be $123,456,789,12, submit 123.46.

6. (Principal-Only MBS and Interest-Only MBS) Referring to the previous question, what is the value of the IO MBS? Submission Guideline: Give your answer in millions rounded to two decimal places. For example, if you compute the answer to be $123,456,789,12, submit 123.46.

7. (Principal-Only MBS and Interest-Only MBS) Referring to the previous question, what is the average life of the IO MBS? Submission Guideline: Give your answer in years rounded to two decimal places. For example, if you compute the answer to be 12.1234 years, submit 12.12.

8. (Principal-Only MBS and Interest-Only MBS) Suppose now that you purchased the IO MBS of the previous question and that the price you paid was the same price that you calculated in the previous question. The risk-free interest rate suddenly changes from 4.5% to 3.5%. Everything else stays the same. How much money have you made or lost on your investment? Submission Guideline: Give your answer in millions rounded to two decimal places. For example, if you compute the answer to be $123,456,789,12, submit 123.46.

9. (Principal-Only MBS and Interest-Only MBS) Referring to the previous question, suppose the risk-free interest rate suddenly changes from 4.5% to 3.5% and that the pre-payment multiplier changes from 100 PSA to 150 PSA. How much money have you made or lost on your investment in the IO MBS? Submission Guideline: Give your answer in millions rounded to two decimal places. For example, if you compute the answer to be $123,456,789,12, submit 123.46

Introduction to Mortgage Mathematics and Mortgage-Backed Securities

I NEED THE SOLUTIONS JUST FOR: 4,5,6,7,8 and 9. Thanks

1.(Level-Payment Mortgages) Compute the monthly payment on a 30-year level payment mortgage assuming an annual mortgage rate of 5% and an initial mortgage principal of $400,000. Submission Guideline: Give your answer rounded to two decimal places. For example, if you compute the answer to be $73.2367, submit 73.24.

2 (Mortgage Pass-Throughs) Consider a $400 million pass-through MBS that has just been created (so the 'seasoning' of the pass-through is equal to 0). The underlying pool of mortgages each has a maturity of 20 years and an annual mortgage coupon rate of 6%. The pass-through rate of the mortgage pool is 5%. Assuming a prepayment multiplier of 100 PSA what is the total amount of interest paid to the pass-through investors? Submission Guideline: Give your answer in millions rounded to two decimal places. For example, if you compute the answer to be $123,456,789,12, submit 123.46.

3 (Mortgage-Pass Throughs) Referring to the same mortgage pass-through of the previous question, what is the total amount of the prepayments? Submission Guideline: Give your answer in millions rounded to two decimal places. For example, if you compute the answer to be $123,456,789,12, submit 123.46.

4 (Mortgage-Pass Throughs) Referring to the same mortgage pass-through of the previous question, what is the total amount of the prepayments if the rate of prepayments increases to 200 PSA? Submission Guideline: Give your answer in millions rounded to two decimal places. For example, if you compute the answer to be $123,456,789,12, submit 123.46.

5 (Principal-Only MBS and Interest-Only MBS) Suppose we construct principal-only (PO) and interest-only (IO) mortgage-backed securities (MBS) using the mortgage pass-through of the previous questions. Assume a prepayment multiplier of 100 PSA. What is the present value of the PO MBS if we use an annual risk-free rate of 4.5% to value the cash-flows? Submission Guideline: Give your answer in millions rounded to two decimal places. For example, if you compute the answer to be $123,456,789,12, submit 123.46.

6. (Principal-Only MBS and Interest-Only MBS) Referring to the previous question, what is the value of the IO MBS? Submission Guideline: Give your answer in millions rounded to two decimal places. For example, if you compute the answer to be $123,456,789,12, submit 123.46.

7. (Principal-Only MBS and Interest-Only MBS) Referring to the previous question, what is the average life of the IO MBS? Submission Guideline: Give your answer in years rounded to two decimal places. For example, if you compute the answer to be 12.1234 years, submit 12.12.

8. (Principal-Only MBS and Interest-Only MBS) Suppose now that you purchased the IO MBS of the previous question and that the price you paid was the same price that you calculated in the previous question. The risk-free interest rate suddenly changes from 4.5% to 3.5%. Everything else stays the same. How much money have you made or lost on your investment? Submission Guideline: Give your answer in millions rounded to two decimal places. For example, if you compute the answer to be $123,456,789,12, submit 123.46.

9. (Principal-Only MBS and Interest-Only MBS) Referring to the previous question, suppose the risk-free interest rate suddenly changes from 4.5% to 3.5% and that the pre-payment multiplier changes from 100 PSA to 150 PSA. How much money have you made or lost on your investment in the IO MBS? Submission Guideline: Give your answer in millions rounded to two decimal places. For example, if you compute the answer to be $123,456,789,12, submit 123.46

The Donald Fertilizer Company produces industrial chemical fertilizers. The projected manufacturing requirements (in thousands of gallons) for the next four quarters are 80, 50, 80, and 130, respectively. A level workforce is desired, relying only on anticipation inventory as a supply option. Stockouts and backorders are to be avoided, as are overtime and undertime.

a. Determine the quarterly production rate required to meet total demand for the year, and minimize the anticipation inventory that would be left over at the end of the year. Beginning inventory is zero.

b. Specify the anticipation inventory that will be produced.

c. Suppose that the requirements for the next four quarters are revised to 80, 130, 50, and 80, respectively. If total demand is the same, what level of production rate is needed now, using the same strategy as part (a)?

Please use excel solution and post the table in formula auditing mode as well so that I may see how the cells were solved. Thank you!

Mr. Toriop owns 5000 shares of stock in Yummy Corporation. The company has announced that it will pay a dividend of $5 per share in one year and then a liquidating dividend of $50 per share in two years. The required return on ABC stock is 10%.

a. What is the current share price of your stock?

b. What will be the company’s share price in one year?

c.       Mr. Toriop wishes to have equal amount of dividend income for the next two years. How can he use homemade leverage on Yummy Corporation’s dividends to achieve this goal? Check that the present value of the cash flows will be the same as they are before the homemade leverage. (Hint: Dividends will be in the form of an annuity.)

Sam Suffolk is a student in MAT103 at SCCC. Sam has data from a random sample of 20 students that represents how many miles​ (rounded to the nearest whole​ mile) each student lives from the SCCC Ammerman campus. Sam organizes this data in the following frequency distribution table. Look at the table carefully and answer the questions that follow.

Sam made two mistakes when creating the classes for this table. Assuming​ Sam's frequencies are​ correct, despite the errors in the class​ limits, answer each of the following.

​Note: The first two lower class limits are correct.

​(a) Identify​ Sam's mistakes.

​(b) Can we determine how many students live 10 miles from the​ campus? If​ so, how​ many? If​ not, why​ not?

​(c) Give an estimate of the number of students in the sample that live more than 25 miles from the campus. If more than one frequency is​ possible, state all possible values.

Exhibit: Costco Customers.

Customers at Costco spend an average of $130 per trip (The Wall Street Journal, October 6, 2010). One of Costco’s rivals would like to determine whether Costco's customers spend more per trip. A survey of the receipts of 25 customers found that the sample mean was $135.25. Assume that the population standard deviation of spending is $10.50 and the spending follows a normal distribution (use the significance level 0.07).

Round your solutions for this Exhibit to 4 decimal places.

1. Refer to the Exhibit Costco Customers.

Provide the null and the alternative hypotheses.

Group of answer choices

H0:μ≤130;H1:μ>130H0:μ≤130;H1:μ>130

H0:μ≥130;H1:μ<130H0:μ≥130;H1:μ<130

H0:μ≤135.25;H1:μ>135.25H0:μ≤135.25;H1:μ>135.25

H0:μ=130;H1:μ≠130H0:μ=130;H1:μ≠130

2. Refer to the Exhibit Costco Customers.

Compute the test statistic.

3. Refer to the Exhibit Costco Customers.

Calculate the p-value for the test.

4. Refer to the Exhibit Costco Customers.

State your conclusion for the test using the p-value.

Group of answer choices

p-value < 0.07, so we reject H_o. Therefore, there is enough evidence to conclude that Costco’s customers spend more than $130 per trip.

p-value < 0.07, so we reject H_o. Therefore, there is not enough evidence to conclude that Costco’s customers spend more than $130 per trip.

p-value < 0.07, so we cannot reject H_o. Therefore, there is enough evidence to conclude that Costco’s customers spend more than $130 per trip.

p-value < 0.07, so we cannot reject H_o. Therefore, there is not enough evidence to conclude that Costco’s customers spend more than $130 per trip.

Alice and Bob are re-enacting Cao Chong’s weighing experiment. They found two types of rocks, ~50 kg in weight and ~20 kg in weight, respectively. Now for an elephant that weighs ~1 ton, the measurement could be done with 20 of 50 kg rocks, or 50 of 20 kg rocks.

Alice argues that the first approach gives a more precise result as more rocks will introduce more error. Bob argues that the second approach is better as the error from different rocks tends to cancel out each other.

Calculate the uncertainty of the final result for the two approaches for the following two cases: (A) The absolute measurement uncertainty for each rock is fixed at 0.5 kg. (B) The relative measurement uncertainty for each rock is fixed at 2%. Which of the above two approaches win out for the two cases? (C) Is there a mathematical form of uncertainty-weight relationship for each rock that would lead to equal uncertainty of the final results for the two approaches?