In this course you will research, simulate, and analyze investing in the capital markets. You will be buying and selling stocks and mutual funds. Plus, you will explore the buying of bonds, options, and futures contracts. The primary source of information for these Assignments will be the Yahoo! Finance website. Next week you will make your first stock purchases. This week begin to research what stocks you might consider putting in your Portfolio. You will explore Yahoo! Finance and produce a minimum of a 1-page paper using the Unit 1 Assignment Template that summarizes your findings. Through the company websites, please research the following companies and stock symbols and report your findings:

 Apple Inc.

 Ford Motor

 RSX (what is this?)

 TV (who are they?)

 FBIOX (what is this?) In each case be sure to report the current price of the security at the time you inquired and a brief description of the security

Research the above companies to fill out the template below.

Unit 1 Assignment: Exploring Stocks

Stocks:

On January 1, 2017 Pioneer Co. issued $550,000 of 5 year 12% bonds for $592,468 yielding a market rate of 10%. Interest is payable semiannually on June 30 and December 31.

a) Confirm the bond issuance price and show your work.

b) Why are two different present value tables used to price the bond?

c) Is this bond issuing at a discount, premium or par? Explain your answer.

d) Create your own amortization table. The table should show the carrying value at January 1 as the first row. Include 2 full years of interest payments. Refer to the videos and text for amortization table examples.

e) Record the following entries on the included Financial Statement Impact Template. a. Jan 1, 2017 bond issuance b. June 30, 2017 interest payment c. Dec 31, 2017 interest payment

f) This company chose to issue a bond as means to raise capital. Identify two reasons a company may choose this type of financing.

Danny likes to buy books (x₁), and CDs (x₂) with his monthly allowance.

a)     (2) Suppose that books cost $10 each and CDs cost $20 each, and Danny has $200 from his allowance to spend this month. Write down the equation of Danny’s budget line.

b)     (4) Suppose Danny’s utility function is U (x₁, x₂) = 2x₁+ x₂. What can you say about Danny’s preferences for books and CDs. What is Danny’s optimal choice of books and CDs? Show the solution on a graph with the budget line and utility function.

c)     (4) Suppose that additionally Danny’s Mom says that she will buy him 5 books every month. Show how the new budget line (with the gift of 5 books) will look like. What will Danny’s new optimal choice be?

d)     (3) If Danny is able to buy the first 5 books at regular price, all additional books are half price, draw Danny’s new budget line.

Wilbur and Orville are brothers.​ They're both serious​ investors, but they have different approaches to valuing stocks.​ Wilbur, the older​ brother, likes to use the dividend valuation model. Orville prefers the free cash flow to equity valuation model. As it turns​ out, right​ now, both of them are looking at the same stock Wright First​ Aerodynmaics, Inc.​ (WFA). The company has been listed on the NYSE for over 50 years and is widely regarded as a​ mature, rock-solid,​ dividend-paying stock. The brothers have gathered the following information about​ WFA's stock:

Current dividend ​(Upper D 0​)=​$1.90​/share

Current free cash flow ​(FCF 0​)=$1.5 million

Expected growth rate of dividends and cash flows ​(g​)=8​%

Required rate of return ​(r​)=12​%

Shares outstanding = 400,000 shares

How would Wilbur and Orville each value this​ stock?

The stock price from​ Wilbur's valuation is?

The stock price from​ Orville's valuation is?

You bought the building, located at Little Ferry, NJ for $50 Million, which was 6% Capitalization Rate (CAP). This building is occupied only by Wal-Mart. You made 40% down and financed 60% of the purchase price at 5% APR, 5 year balloon with 25 year amortization schedule. You have 25 year Absolute Triple Net lease with Wal-Mart. There is no annual escalation of the base rent. The building’s $50 million value consists of $25 million land value and $25 million improvement. In addition to $50 million purchase price, you had to pay 3% transaction (closing) costs (equivalently $1.5 million), which include the legal, financing, administrative, inspection, and all taxes. Use 39 years for the annual depreciation. Assume 30% tax rate.

What is the net cash flow for the first year? Note: Net Cash Flow is defined as NOI – Annual Interest Payment – Tax + Annual Depreciation.

Customer Order Example

ORDER NO: 61384                                                            ORDER DATE: 9/24/2014

CUSTOMER NO: 1273

CUSTOMER NAME: CONTEMPORARY DESIGNS

CUSTOMER ADDRESS: 123 OAK ST.

CITY STATE ZIP: AUSTIN, TX 28384

PRODUCT                                        QUANTITY    UNIT                          EXTENDED

NO                DESCRIPTION         ORDERED    PRICE                        PRICE

M128              BOOKCASE                4                   200.00                        800.00

B381               CABINET                      2                   150.00                        300.00           

R210              TABLE                          1                   500.00                        500.00

                                                                                    TOTAL                  1600.00

Normalize this user view. Make sure to show your work for each view – you should have 4 answers (e.g. Unnormalized, First Normal Form (1NF), Second Normal Form (2NF) and Third Normal Form (3NF). It is possible that some tables will be in 3NF without any changes to their 2NF status. You may just note that in your response. Also make sure to follow good DBDL protocol by capitalizing the relation name, putting attributes in parenthesis and underlining primary keys.

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Algol Rigel works with her brother Altair Rigel in a small tourism business known as Beacon Tours that operates in Tasmania. To promote the business Algol creates several vouchers. These vouchers confirm that for the first ten customers that bring the voucher plus a friend to the business premises on a weekday that they will be entitled to a tour of Port Arthur for an introductory price of $50. Normally such tours are conducted by Algol’s business at a price of $200 per person. The brochures are placed into a number of letter boxes in suburbs around Hobart and Launceston. The next Monday Horton Hearsawho arrives at the business with his friend Ned McDodd and they claim the right to be taken on the tour of Port Arthur that same day. Algol tells them that the vouchers were just promotional. Horton disagrees. Both are friends of yours and have sought your assistance.

Required:

Advise Algol and Horton using the principles of offer and acceptance

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Questions to Consider:

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Has a valid offer been made?

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Has that offer been accepted?

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How was acceptance to take place?

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Is there agreement?

Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price, and holds these investments in its trading portfolio. The company’s fiscal year ends on December 31. The following selected transactions relating to Rantzow-Lear’s trading account occurred during December 2021 and the first week of 2022. 2021 Dec. 17 Purchased 145 Grocers’ Supply Corporation bonds at par for $652,500. 28 Received interest of $3,800 from the Grocers’ Supply Corporation bonds. 31 Recorded any necessary adjusting entry relating to the Grocers’ Supply Corporation bonds. The market price of the bond was $5,000 per bond. 2022 Jan. 5 Sold the Grocers' Supply Corporation bonds for $688,750.

Required:
1. Prepare the appropriate journal entry or entries for each transaction.
2. Indicate any amounts that Rantzow-Lear Company would report in its 2021 balance sheet and income statement as a result of this investment.

RS p.1.c. manufactures domestic food mixers. It is investigating whether or not to accept a three-year contract to make a new model for sale through a supermarket chain. The contract uses skilled labour which cannot be increased above that currently available and RS p.1.c. will receive a fixed price of £42 per mixer for all the mixers it can produce in the three-year period. The following estimates have been made:

Capital investment £50000 payable now, with nil scrap value.

Additional overhead £25000 per annum.

Materials £30 per mixer Labour £6 per hour.

The factory manager knows from experience of similar machines that there will be a learning effect for labour. He estimates that this will take the form:

y = ax^-0.3

where y = average labour hours per unit

a = labour hours for first unit

x = cumulative production

He estimates that the first mixer will take 10 hours to produce and that the fixed amount of labour available will enable 5000 mixers to be produced in the first year. Apart from the capital investment, all cash flows can be assumed to arise at year ends. The company has a cost of capital of 15%. You are required

(a) to calculate the NPV of the proposed contract

(b) to state what other factors need to be considered before a final decision is made.