future value? B. 7 percent interest‚ compounded monthly 5. Hilltop‚ Inc. earns $.12 in profit on every $1 of sales. The firm pays out 55 percent of its profits to its shareholders. The firm has $.75 in assets for every $1 of sales. What is the internal growth rate? B. 7.76 percent 6. Your firm has been told that it needs $100‚000 today to fund a $150‚000 expansion project 8 years from now. What rate of interest was used in the present value computation? B. 5.20 percent 7. The current value of future
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risk-free rate of interest (krf) value is gathered from the Bloomberg.com website. The 10-year U.S. Treasury bond rate is the risk-free rate. According to the Bloomberg.com‚ the U.S. 10-year Treasury bond ‘coupon’ is 2.625 or 2.6% (as of Thursday 20‚ January 2011) (Rates & Bonds: Government Bonds‚ 2011). The assumed market risk premium is assumed at being 7.5%. Information gathered from the XYZ Stock Information page (downloaded via IP assignment) reveals the following values: * XYZ’s beta (β) =
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PROBLEM SET # 1 Instructions: 1) Open book‚ open notes limited to only class materials. 2) Unlimited time. 3) This must be reflective of your individual effort. GMU Honor Code applies. 4) The Problem Set #1 (only the question solutions portion) is due at the end of the day on September 24th. 5) Show all work‚ as partial credit will be given for each question’s answer. Organize your work so it is easy to follow. You can use word‚ power point‚ excel or combinations
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intrinsic value of securities 4.Understand the tools in corporate finance and apply them to solve the key issues in corporate finance 5.Discover the complex interaction between the economy and the financial markets 6.Become comfortable engaging in discussion and debate over finance and related issues Specific objectives : 1. Understand the tools in analyzing firm’s financial statements 2.Compute the expected rate of return for investment projects. 3.Apply several valuation methods to value projects
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Response Feedback: PI = PV of all Future CFs/|initial outlay| Question 4 0 out of 1 points If you receive $1‚939 at the end of each year for the first three years and $2‚224 at the end of each year for the next two years. What is the future value of this cash flow stream? Assume interest rate is 4%. Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example‚ if your answer is $12.345 then enter as 12.35 in the answer box.
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and wine has a 12 percent profit margin. Beer has a 27 percent contribution margin and wine has a 25 percent contribution margin. If other factors are equal‚ which product should H55 push to customers? 13) The cost of an asset and its fair market value are __________. 14) Which one of the following items is not generally
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|[pic] |Course Syllabus | | |School of Business | | |FIN/370 Version 7 | |
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where is it shown on a time line? Is this opportunity rate a single number that is used to evaluate all potential investment? The rate of return you would earn on an alternative investment of small risk if you don’t invest in the security under consideration. An opportunity cost is the difference in return between an investment that has chosen for investment and one that is inevitably gave up. For example‚ if a person invests in equity and get 3% return over a period of time then by investing his/her
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-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 cost of capital‚ interest
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Pacific over the years of our forecast from FY2012 to FY2015. Based on the calculations‚ several assumptions and limitations on BreadTalk’s intrinsic value of share price were analysed and consequently estimated with four models. These models are Dividend Valuation Model‚ Free Cash Flow to Equity Model‚ Price/Earnings Ratio Model and the Price/Book Value Model. Through the use of the mentioned models‚ we will conduct an in-depth analysis and evaluate on the results obtained to provide an assessment
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