An insurance company issued a $100 million one-year, zero-coupon note at 6 percent add-on annual interest (paying one coupon at the end of the year) and used the proceeds plus $20 million in equity to fund a $120 million face value, two-year commercial loan at 5 percent annual interest. Immediately after these transactions were (simultaneously) undertaken, all interest rates went up 1.5 percent. What is […]

Sound ways to predict a firm’s earnings per share are to A. rely on consensus estimates because consensus estimates are an average of individual estimates. This helps eliminate outliers. B. do it yourself, using extrapolative statistical models because you can use the methodology and model you trust the most C. rely on consensus estimates because financial analysts know best D. A and B GraduateWriterHelp.com is […]

TOPIC :Foreign Exchange (FX) Futures pricing Assume that (1) the current U.S. dollar spot exchange rates for the British Pound (BP) and Mexican Peso (MP) currencies are $1.30000/BP and $0.05400/MP, respectively. Also, the 180-day U.S. and Mexican Libor interest rates are 1.50000% and 6.70000%, respectively. (a) Compute the 180-day US/MP futures price. (b) If the 180-day BP futures price is $1.30585/BP, what is the implied […]

Assume that the real risk-free rate, r*, is 2% and that inflation is expected to be 7% in Year 1, 6% in Year 2, and 3% thereafter. Assume also that all Treasury securities are highly liquid and free of default risk. If 2-year and 5-year Treasury notes both yield 10%, what is the difference in the maturity risk premiums (MRPs) on the two notes; that […]

Price and yield An 7% semiannual coupon bond matures in 6 years. The bond has aface value of $1,000 and a current yield of 7.4577%. What is the bond’s price? Round your answer to the nearestcent. $ What is the bond’s YTM? (Hint: Refer to Footnote 7 for thedefinition of the current yield and to Table 7.1.) Round youranswers to two decimal places. % GraduateWriterHelp.com […]

Show your work, 1. The fieldstone flooring company series A bonds have 5 years to maturity. Interest rate is paid annuary; the bonds have a $1,000 par value; and the coupon rate is 9 %. a) what is the yeild to maturity, at a curerent market price of $829 ? b) whta us the yeild to maturity at a market price of $1,104? GraduateWriterHelp.com is […]

ning Time: 36 34 minutes, ion Completion Status: Close Window Question 22 of 24 Moing to another question will save this response 3 points Save Ans stion 22 zale Inc. decides to bomow money rather than issue stock to raise captal for their new product development-the company is making ain) o a marketing o b capital budneting c capital stracture od working capital Question 22 […]

Problem 5-25 Leverage and sensitivity analysis [LO6] The Lopez-Portillo Company has $11.6 million in assets, 60percent financed by debt, and 40 percent financed by common stock.The interest rate on the debt is 14 percent and the par value ofthe stock is $10 per share. President Lopez-Portillo is consideringtwo financing plans for an expansion to $23 million in assets.Under Plan A, the debt-to-total-assets ratio will be […]

Winter Time Adventures is going to pay an annual dividend of $2.72 a share on its common stock next week. This year, the company paid a dividend of $2.60 a share. The company adheres to a constant rate of growth dividend policy. What will one share of this common stock be worth 11 years from now if the applicable discount rate is 9.0 percent? $94.21 […]

Problem 2: The company Argentinian Grill has a 7-year loan $ 23.500 with thelocal bank. His plan is to start paying the loan in seven equalinstallments starting today. If the interest rate It is 8.4%, calculates the annuity payment. Problem 3: You currently have 25 and want to retire at the age of 65. As acomplement to other sources of retirement, you could deposit $3,000 […]