Assignment 1 NPV: = -PF + FV /(1+r) PV = FV/(1+r) or PV = C1/1-r + C2/(1-r)2 + .. + CT/(1-r)T Rate of return: R=(Vf-Vi)/Vf Rate r compounded m times a year: FV = C(1+r/m)mt 10% semiannually = 10.25% annually‚ Hence 10.25 is said to be the Effective Annual Yield (EAY) 1+EAY = (1+r/m)mt Assignment 2 Perpetuity The value of D received each year‚ forever: PV = D/r Annuity The value of D received each year for T years: PV = (D/r)*[1 – 1/(1+r)T] Growing Perpetuity PV = D/(R-g) R: the
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asset-backed financings or single-lessee leasing arrangements. 2.) Even though the investment risk is greater than 10% of the total assets for LeaseMed‚ you still have to demonstrate that the equity is sufficient to permit the legal entity to finance its own activities according to ASC 810-10-25-45a‚b‚c. LeaseMed does not meet qualification A because it is not able to issue investment grade debt and there is no evidence that it has invested into other similar entities (qualification B). So it
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I really enjoyed the talk with Taylor Westerfield about her recent onset of disability. Her talk about how it feels like to live with chronic pain and an invisible disability was insightful. I hadn’t even heard about Ehlers–Danlos syndrome (EDS) or Complex regional pain syndrome (CRPS) before. She talked about a lot of important issues like how a disability can change relationships with people‚ how it can make it difficult to get around‚ and how it’s like to be looked at and treated differently when
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over other types of firms. One of them is the unlimited liability.Answer | | | | | Selected Answer: | False | Correct Answer: | False | | | | | * Question 4 1 out of 1 points | | | Two important financing decisions for a corporate financial manager are debt policy decision and dividend policy decision. Debt policy asks what level of debt is best for the firm. The dividend policy asks what dividend payout ratio is best for the firm.Answer | | | | | Selected Answer: |
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ROBERTO Ristorante 1- In a few phrases‚ describe the situation of the Roberto and Chez Léon chain. 2- Without the Chez Léon chain‚ would you think that the Roberto chain has a positive‚ nil or negative value? 3- What are the foundations of value for Chez Léon? 4- Given the objectives of the Italian State‚ would you recommend that the sale be completed: a. On an open bid basis? b. Via a private negotiation‚ selecting the
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Student’s Manual Essential Mathematics for Economic Analysis 3 edition rd Knut Sydsæter Arne Strøm Peter Hammond For further supporting resources please visit: www.pearsoned.co.uk/sydsaeter Preface This student’s solutions manual accompanies Essential Mathematics for Economic Analysis (3rd edition‚ FT SM ⊃ Prentice Hall‚ 2008). Its main purpose is to provide more detailed solutions to the problems marked ⊂ in the text. This Manual should be used in conjunction with the answers in
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Planning Multiple Choice Questions 1. One key reason a long-term financial plan is developed is because: A. the plan determines your financial policy. B. the plan determines your investment policy. C. there are direct connections between achievable corporate growth and the financial policy. D. there is unlimited growth possible in a well-developed financial plan. E. None of the above. 2. Projected future financial statements are called: A. plug statements. B. pro forma statements. C. reconciled statements
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Final Exam Practice Problems 1. Firm ABC’s only outstanding debt is $100‚000 worth of coupon bond (market value). Its yield to maturity is 8%. Given that its tax rate is 40%‚ what is its effective cost of debt? Effective cost of debt = cost of debt * (1-tax rate) =8%*(1-40%)=4.8% 2. Firm ABC has a stock currently traded at $20. The next year’s dividend will be $0.20. The dividend growth rate is forecasted to be 6% forever. Risk-free rate is 3%‚ and market risk premium is 4%. Assume that Constant
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Solutions to Chapter 10 Introduction to Risk‚ Return‚ and the Opportunity Cost of Capital capital gain + dividend ($44 − $40) + $2 = = 0.15 = 15.0% initial share price $40 1. Rate of return = Dividend yield = dividend/initial share price = $2/$40 = 0.05 = 5% Capital gains yield = capital gain/initial share price = $4/$40 = 0.10 = 10% 2. Dividend yield = $2/$40 = 0.05 = 5% The dividend yield is unaffected; it is based on the initial price‚ not the final price. Capital gain = $36 – $40
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Chapter The Basic 2 Theory of Interest 1. (A nice inheritance) Use the "72 rule". Years = 1994-1776 = 218 years. (a) i = 3.3%. Years required for inheritance to double = Zf = 8 :’=! 21.8. Times doubled= Hi = 10 times. $1 invested in 1776 is worth 210 :’=! $1‚000 today. (b) i = 6.6%. Years required to double = ~ :’=! 10.9. Times doubled = ~ times. $1 invested in 1776 is worth 220 :’=! 000‚ 000 today. $1‚ 2. (The 72 rule) Using (1 + r)n = 2 gives nIn (1 +r) In2 = 0.69. We have nr :’=! 0.69 and
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