$95 million‚ and $80 million. These outcomes are all equally likely‚ and this risk is diversifiable. Gladstone will not make any payouts to investors during the year. Suppose the risk-free interest rate is 5% and assume perfect capital markets. a. What is the initial value of Gladstone’s equity without leverage? Now suppose Gladstone has zero-coupon debt with a $100 million face value due next year. b. What is the initial value of Gladstone’s debt? c. What is the yield-to-maturity
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resume for the post of a computer operator in a commercial bank. Notice: 1. Suppose you will not be able to take classes on Sunday. Now write a notice about it. 2. Suppose you are the managing director of a company. Some of the staff are not (2) maintaining the office time. Now‚ write a notice to warn them. One of your friends has died recently in an accident. Prepare a notice for a condolence meeting. 3. Suppose you have
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prevent Maytag from entering this market by increasing its advertising levels? What is the equilibrium outcome in this game? Suppose that an analyst at GE is convinced that just a little bit more advertising by GE‚ say another $2m‚ would be sufficient to deter enough customers from buying Maytag‚ thus‚ yield less than $0 profits for Maytag in the event it enters. Suppose that spending an extra $2m on advertising by GE will reduce its expected profits by $1.5 m‚ regardless of whether Maytag enters
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single link of rate R bps. Suppose the two hosts are separated by m meters‚ and suppose the propagation speed along the link is s meters/sec. Suppose host A begins to transmit a packet of size L bits at time t = 0. 1. Let dtrans denote the time to transmit the packet. At time t = dtrans where is the last bit of the packet? 2. Let dprop denote the propagation delay. Suppose dprop is greater than dtrans . At time t = dtrans where is the first bit of the packet? 3. Suppose s = 2.5 × 108 ‚ L = 120
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CAPITAL BUDGETING Cost of Capital Evaluating Cash Flows Payback‚ discounted payback NPV IRR‚ MIRR The Cost of Capital • Cost of Capital Components – Debt – Common Equity • WACC Should we focus on historical (embedded) costs or new (marginal) costs? The cost of capital is used primarily to make decisions which involve raising and investing new capital. So‚ we should focus on marginal costs. What types of long-term capital do organizations use? nLong-term debt nEquity Weighted
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Velocity also includes a direction the acceleration of gravity on earth is approximately 10m/s2 if you drops rock from a tall building‚ about how fast will it be falling after 3 seconds? 30m/s Momentum is defined as Mass time’s velocity suppose you live on the moon. Which of the following would be true? Your weight would be less than your weight on Earth‚ but your mass would be the same as it is on Earth. In which of the following would you feel weightless? While falling from a roof
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supply when the price is $80. When the price is$100. c. What are the equilibrium price and quantity? d. Suppose the government sets a price ceiling of $80. Will there be a shortage‚ and‚ if so‚ how large will it be? 2. Refer to Example 2.4 on the market for wheat. At the end of 1998‚ both Brazil and Indonesia opened their wheat markets to U.S. farmers. (Source: http://www.fas.usda.gov/) Suppose that these new markets add 200 million bushels to U.S. wheat demand. What will be the free market price
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work in order to receive any partial credit on this exam. 1. (16 points) Suppose a firm has a production function given by Q = L1/2K1/2. Therefore‚ MPL = ‚ and MPK = The firm can purchase labor‚ L at a price w = 9‚ and capital‚ K at a price of r = 16. What is the firm’s total cost function? TC = 24Q 2. (18 total points) Suppose a monopolist faces a demand curve P = 134 – 2Q. The monopolist’s marginal
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ECON 130 tutorial questions Tutorial 1 (week 3): Thinking like an economist. MC1. Suppose Frieda is offered a free voucher that entitles her to one of the following: a movie‚ dinner at a restaurant‚ or a concert. Frieda values the movie at $15‚ dinner at $20 and the concert at $40. Frieda’s opportunity cost of going to dinner is: a) $15. b) $20. c) $40. d) $55. Question 1. What are the essential elements of the basic competitive model? Question 2. Consider a lake in a national
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Which of the following is the least useful sales forecasting model to use when sales are increasing? Select one: Trend adjusted exponential smoothing Weighted moving average Naïve Exponential smoothing ? Simple mean x Which of the following forecasting methods is most likely to be implemented to change an existing quantitative forecast to account for a new competitor in the marketplace? Select one: Gamma method Executive opinion Market research Naïve method Delphi method
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