security and the interest rate on an alternative‚ “risk-free” investment both of the same maturity. An asset’s risk premium is a form of compensation for investors who are willing to take on the uncertainties associated with a risky investment. This is used to attract investors to purchase equity securities from a corporation by giving them the potential for a larger return than a riskless alternative such as depositing money in a bank. For instance‚ risk premium can be expressed as an interest rate that
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Malaysia is supported by two crucial finance; i.e. Bridging Finance and End Finance. Bridging finance is a loan amount provided to the developer on top of any other loan obtained for the project. It is usually given as a short period with higher interest rate subject to security provided‚ and usually provided after the planning approval or at the end of the completion of the construction works of the project. Bridging finance is available in various forms; i.e. ‘term loan’ with a fixed repayment
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Example 14.3: Yield to Maturity Suppose an 8% coupon‚ 30year bond is selling at 1‚276.76 what average rate of return would be earned by an investor purchasing the bond at this price? We find the interest rate at which the present value of the remaining 60 semiannual payments equal the bond price. This is the rate consistent with the observed price of the bond. Therefore‚ we solve for r in the following equation: [pic] 1‚276.76 = [pic] $40 + $1000
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OPERATING & FINANCIAL PERFORMANCE OF THE COMPANY PROFITABILITY RATIOS * Gross Profit marging Gross ProfitSales×100% 2010/2011 2009/2010 = (171‚325‚029/435‚759‚776) *100 = (59‚257‚454/327‚593‚843)*100 = 39.3164% = 18.0887% * Profit Margin = NPBT * 100 Sales 2011/2012 2010/2011 = (41‚896‚089/ 435‚759‚776)
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facility for private uses in 2013‚ which had not recorded any overdue payment or other problems. He also did not require to extend his overdraft amount for private uses with generally only used half of the overdraft amount and able to pay monthly interest. It represents he is not an upstart and has fair ability to control his money expenses. For his personality‚ as the breadwinner of the family‚ he aged 40 and has been worked in company over ten years. The bonus of business performance also indicates
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that AirJet Parts‚ Inc. is considering loans from National First and Regions Best‚ what are the EARs for these two banks? Hint for National Bank: Go to the St. Louis Federal Reserve Board’s website (http://research.stlouisfed.org/fred2/). Select “Interest Rates” and then “Prime Bank Loan Rate”. Use the latest MPRIME. Show your calculations. (15 pts) EAR= [1+ (APR/m)] m-1 National First- EAR: (1-[.0325+.0675]/2)^2 – 1 = 1+ (.1/2) = 1.05^2= 1.1025- 1= .1025 or 10.25% Regions Best- EAR: (1 + [.1317/12]
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Personal Finance October 1‚ 2012 Personal Finance Basics and Time Value of Money This chapter has helped me to understand how important money and financial planning is to my present and future well being. I learned and realized just through the definition of the word personal financial planning that it means how we can map out our money and manage it better in given time frames. Managing your money is key and fundamental to your future stability and happiness. It can make your quality of living
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DECLARATION I declare that this attachment report is my original work and has not been presented or submitted for degree award in any other university/college. Sign……………………………………………. Date……………………………………………. MICHAEL W. MURIUKI Approval This attachment report has been submitted for examination with the approval of the following supervisor: Sign……………………………………………………………. Date……………………………………………………………… ACKNOWLEDGEMENT First and foremost I thank Almighty God for guiding me all through this period of my Industrial
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1- Al-Ahli Bank has issued a one-year commitment loan of BD 7 million at an interest rate of 5%. The Bank requires a compensating balance of 15% on loan given. The bank must maintain 5% reserve requirement on the compensating balance. The customer is expected to draw down 80% of the commitment. The total fees collected (up-front and Back end) from the customer are 12‚280. What is the expected rate of return of this loan for the Bank? Answer: Loan given = 7m x 80% = $5‚600‚000 Compensating
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1. Are the four components of Marriott’s Financial Strategy consistent with its growth objective? Marriott’s sales grew up by 24% and its return on equity stood at 22% in the year 1987‚ the sales and earnings per share has doubled over the previous year as stated in the case study. The company operates in three divisions: lodging‚ contract services and restaurants which represents 41%‚ 46% and 13% of sales in 1987 respectively. Marriott is determined to develop and to enhance its position in each
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