Bonds-1. Interest on a certain issue of bonds is paid annually with a coupon rate of 8%. The bonds have a par value of $1‚000. The yield to maturity is 9%. What is the current market piece of these bonds? The bonds will mature in 5 years. P= CPN x (1/y) {1-[1/(1+y)^n] + [FV/ (1+y)^n] CPN= 1000 x .08= 80 P= 80 (1/.09) {1- [1/(1.09)^5]} + [1000/(1.09)^5] = 73.39 (.351) + 649.35 = $675.11 Bonds-2. A certain bond has 12 years left to maturity. Interest is paid annually at a coupon rate of 10%. The bonds
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DPOR= | DIVIDENDS PER SHARE | | | | | EARNINGS PER SHARE | | | | | | | | | DPOR= | 0.82 | | | | | 3.46 | | | | | | | | | DPOR= | 24% | | | | | | | | | | | | | | | | | | | 4.) DIVIDEND YIELD RATIO | The
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Of course‚ a fast follower will only obtain a temporary advantage‚ as many competitors will begin to implement the innovative IT system. 3. What other industries could potentially benefit from the use of yield management systems? Almost all industries could benefit from the use of a yield management system. Like in health care industry for doctor visits and even the telecommunications industry for shared modem services. 4. How can American and United use customer information to
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your hypothesis‚ outcomes‚ and analysis: Table 1: Maize Yield From Arable Soil Amount of Mineral Nitrogen Fertilization (kg per 100 acres) Yield of Maize (mg of dry mass per 100 acres per year) in Arable Soil 0 8 20 10.7 40 13 60 15.2 80 16.4 100 18.2 120 19.2 140 20.8 160 20.4 180 20.1 Table 2: Maize Yield from Non-arable Sandy Loam Soil Amount of Mineral Nitrogen Fertilization (kg per 100 acres) Yield of Maize (mg of dry mass per 100 acres per year) in Non-arable
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CAPM considers three important variables‚ the Risk Free Rate (RF)‚ the Market Risk Premium (RM - RF) and the company Beta (β). 1. Risk Free Rate: RF = 5.74 (Current yield on 20-year U.S. treasuries) The maturity period for Nike’s current publicly traded debt is 25 years. The closest available information on current risk free yields is for 20-year bonds. 2. Market Risk Premium: (RM – RF) = 5.9% (Geometric mean) Here the geometric mean is used instead of the arithmetic mean as it is better long-term
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FIN-516 – WEEK 2 – MINI – CASE ASSIGNMENT 1. What is the name of the company? What is the industry sector? General Electric Industrial Goods 2. What are the operating risks of the company? 3. What is the financial risk of the company (the LT debt to total capitalization ratio)? Debt to equity = Total debt ÷ GE shareowners’ equity = 11‚589 ÷ 116‚438 = 0.10 4. Does the company have any preferred stock? (shares/book value/market price and value) GE does not have any preferred
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total estimated number of issued shares in companies of this industry[3]. Net profit margin of 6.5% is a measure of profitability as well as‚ shows pricing strategy and how the companies within Apparel store manage their costs. Additionally‚ dividend yield in this industry is only 1.1%‚ which illustrates the rate of return on investment. P/E ratio in this industry is
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Financial Ratios Used In GLO-BUS Profitability Ratios (as reported on pages 2 and 6 of the GLO-BUS Statistical Review) • Earnings per share (EPS) is defined as net income divided by the number of shares of stock issued to stockholders. Higher EPS values indicate the company is earning more net income per share of stock outstanding. Because EPS is one of the five performance measures on which your company is graded (see p. 2 of the GSR) and because your company has a higher EPS target each year
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weight of equity is 0.902 and the weight of debt is 0.098. In order to determine the cost of debt‚ the yield to maturity of the debt must be calculated. Using a financial calculator (N=30‚ PV=-$95.60‚ PMT=$3.375‚ FV=$100)‚ the YTM is equal to 7.24%. This is the cost of debt. The cost of equity can be determined using the Capital Asset Pricing Model (CAPM). Joanna was correct in using the 20-year yield on U.S. treasuries as her risk-free rate and was also correct in using 5.90% as her risk premium. However
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answers to essay type parts so as to guarantee that your answer is an original. Do not submit as your own. Chapter 10 Problems 2. LL Incorporated’s currently outstanding 11% coupon bonds have a yield to maturity of 8%. LL believes it could issue at par new bonds that would provide a similar yield to maturity. If its marginal tax rate is 35%‚ what is LL’s after-tax cost of debt? rd(1 - T) = 0.08(0.65) = 5.2%. 4. Burnwood Tech plans to issue some $60 par preferred stock with a 6% dividend
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