Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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- an.3 answer must be in proper format or i will give down votearrow_forwardDyer Furniture is expected to pay a dividend of D1 = $1.25 per share at the end of the year and that dividend is expected to grow at a constant rate of 6.00% per year in the future. The company's beta is 1.15. the market risk premium is 5.50%, and the risk-free rate is 4.00% What is Dyer's current stock price? a. $28.90 b. $29.62 C. $31.12 d. $30.36 e. $31.90arrow_forwardHelp pleasearrow_forward
- The Weiland Computer Corporation is trying to choose between the following mutually exclusive design projects, P1 and P2: Year 1 3 Cash flows (P1) -$53,000 27,000 27,000 27,000 Cash flows (P2) -$16,000 9,100 9,100 9,100 a. If the discount rate is 10 percent and the firm applies the Net Present Value (NPV) decision rule, which project should the firm accept? b. If the firm applies the profitability index (PI) decision rule, which project should it take?arrow_forwardKara, Incorporated, imposes a payback cutoff of three years for its international investment projects. Assume the company has the following two projects available. Year Cash Flow (A) 0 -$56,000 1 2 3 4 22,500 29,600 24,500 10,500 Cash Flow (B) -$ 101,000 a. Project A Project B b. Project acceptance 24,500 29,500 29,500 239,000 a. What is the payback period for each project? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. b. Which, if either, of the projects should the company accept? years yearsarrow_forwardConsider a project lasting one year only. The initial outlay is $1,000 and the expected inflow is $1,290. The opportunity cost of capital is r = 0.29. The borrowing rate is rD calculations. Round your answers to 2 decimal places. Leave no cells blank - be certain to enter "O" wherever required.) 0.21. (Do not round intermediate 0.08, and the tax shield per dollar of interest is Tc a. What is the project's base-case NPV? Base-case NPV b. What is its APV if the firm borrows 39% of the project's required investment? Adjusted present valuearrow_forward
- Nikul Don't upload image pleasearrow_forwardHow I resolve this problems please give me the detail A firm has the following investment alternatives: Year A B C 1 $400 $--- $---- 2 400 400 ---- 3 400 800 ---- 4 400 800 1,800 Each investment cost of capital is 10 percent a. What is each investment's internal rate of return? b. Should the firm make any of theses investment? C. What is each investemtn's net present value? d. Should the firm make any of these investmentarrow_forwardA company is considering two projects. The discount rate is 10 percent, and the projects' cash flows would be: Years 1 2 3 Project A -$700 S500 S300 s100 Project B -$700 $100 $300 | $600 a. Calculate the projects' NPVS. b. If the two projects are independent, which project(s) should be chosen? c. If the two projects are mutually exclusive, which project should be chosen?arrow_forward
- A company is considering two projects. The discount rate is 10 percent, and the projects' cash flows would be: Years 3 Project A Project B -S700 $500 $300 $100 -$700 $100 $300 $600 a. Calculate the projects' NPVS. b. If the two projects are independent, which project(s) should be chosen? с. If the two projects are mutually exclusive, which project should be chosen?arrow_forwardMansukhbhaiarrow_forwardManshukharrow_forward
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