If you have a 5.75% back-load charge and you invest $4,000, how much of this money will be invested in the mutual fund? Amount invested in the mutual fund:
Q: shortly explain all the capital structure theories and compare them with your own words
A: Capital structure theories are frameworks that provide insights into how firms should finance their…
Q: An investor is considering the purchase of a(n) 7.500 %, 15-year corporate bond that's being priced…
A: Here,ParticularsValuesAnnual coupon rate7.500%Number of years15.00Yield to maturity…
Q: Suppose you conduct currency carry trade by borrowing $1,000,000 at the start of each year and…
A: As per the given information:Borrowing = $1,000,000Exchange rate on January 1, 2000 = NZ$1.9110/$
Q: alculating Annuity Payments You want to be a millionaire when you retire in 40 years. How much do…
A: Due to compounding of interest over the period of time large amount of interest is being accumulated…
Q: The Redwood Company is financed entirely with equity. The company is considering a loan of $20…
A: To calculate the increase in firm value attributed to the interest tax shield of the loan, we can…
Q: M.a.k.e. .a. .s.i.m.p.l.e. .e.x.p.l.a.n.a.t.i.o.n. .w.i.t.h. .e.x.a.m.p.l.e. .o.f. .t.h.e.…
A: Stock valuation is the process of determining the natural value of a company's stock. Investors and…
Q: Nicholson Roofing Materials, Inc., is considering two mutually exclusive projects, that both cost…
A: Net present value and internal rate of return are the modern methods of capital budgeting that are…
Q: Haricot Corporation and Pinto Corporation both have operating profits of $195 million. Haricot is…
A: Data given:Haricot Corporation:Operating Profits =$195 millionFinanced solely by equityPinto…
Q: Kapiti Jumbo Prawn Corp. is a seafood company that exports high-quality prawns to North American…
A: When the company receives profits and distributes them among the shareholders. That share of profit…
Q: For the cash flows shown, calculate the present worth in year 0. Assume an interest rate of 14% per…
A: Present value or Present worth analysis is commonly used in financial decision-making, such as…
Q: Could you please solve this question, without graphs or tables? Ensure the workout is correct and…
A: Project AlphaInitial Investment = i = $10,000Cash Flow in year 2 = cf2 = $12,000Time = t = 2…
Q: JenBritt Incorporated had a free cash flow (FCF) of $76 million in 2019. The firm projects FCF of…
A: When will calculating the value of operation we will be considering the total growth rate and the…
Q: Please explain thoroughly using Excel and show formulas. Consider the following projects. Project…
A: NPV is also known as Net present value. it is a capital budgeting techniques which help in decision…
Q: 30-year maturity, 8.3% coupon bond paying coupons semiannually is callable in five years at a call…
A: Maturity = 30 yearsCall price = $1115Yield to maturity = 7.30%Coupon rate = 8.30% (Semi-annual…
Q: Suppose that you purchase a 4-year $700 annual coupon bond with a coupon rate of 5%. Assume that…
A: The PV of an investment refers to the cumulative value of the cash flows of the investment assuming…
Q: Acme Oscillators is considering an investment project that has the following rather unusual cash…
A: Here,YearCF0 $ 10,00,00,000.001 $ -46,04,00,000.002 $ 79,05,00,000.003 $ -60,16,00,000.004 $…
Q: 5) Company is considering about buying an equipment. This equipment needs 100.000 $ initial…
A: Net present value and internal rate of return are the modern methods of capital budgeting that are…
Q: Happy Time Inc. is expected to generate the following cash flows for the next year, as shown in the…
A: The expected return is the estimation of profit or loss that an investor determine from his…
Q: F-i-n-d- -a- -d-i-f-f-e-r-e-n-t- -t-y-p-e-s- -o-f- -c-h-e-c-k-i-n-g- -a-c-c-o-u-n-t-s-…
A: Checking accounts are a crucial banking service that help people handle their daily financial…
Q: Levy Corp. is an unlevered firm worth $507,000 (market value). There are 14,000 shares of stock…
A: To calculate the cost for repurchasing each share of stock, we need to consider the amount of stock…
Q: What is the present value of $ 42,000 to be received 6 years from today, assuming an annual discount…
A: Future value = $42,000Period = 6 yearsInterest rate = 9%
Q: Use the basic equation for the capital asset pricing model (CAPM) to work each of the following…
A: Hi Student,Thanks for the questions. As per Bartleby answering guidelines we can answer only the…
Q: The Redwood Company is financed entirely with equity. The company is considering a loan of $20…
A: Amount of Loan is 20 millionCost of Loan is 8%Time Period of Loan is 2 yearsTax Rate is 24%
Q: Today is Janet's 23rd birthday. Starting today, Janet plans to begin saving for her retirement.…
A: Annual contribution = $3,000 Lump sum contribution = $20,000 Interest rate, r = 11% Period, n = 42…
Q: o & Grace deposit $750 at the end of every three months for 7 years into an account earning 6.1%…
A: More is the compounding of interest than more is the effective rate of interest and more is the…
Q: A company issued bonds with a 30-year maturity, a $1,000 par value, a 13.0% coupon rate, and…
A: A bond refers to a debt instrument used to raise capital from investors rather than traditional…
Q: A quantity of steel in the amount of $423,000.0 is needed for a project, payment due (from…
A: GivenAmount of steel Purchased = $423000Payment spread over = 4 month periodRate of Interest = 18%…
Q: Notes on completes Markets Competitive equilibrium in multi-period security markets
A: Complete markets and competitive equilibrium in multi-period security markets refer to a theoretical…
Q: Chrome Company is considering the purchase of a machine for $24,000 that would reduce operating…
A: Companies can boost their total profitability, increase sales, and minimize expenses by choosing and…
Q: Coxx, Inc., has a debt-value ratio of 0.75. The firm's weighted average cost of capital is 12…
A: Debt-value ratio = 0.75 WACC = 12% Cost of equity = 18% Tax rate = 40%
Q: A.s.s.u.m.e.d. .t.h.a.t. .y.o.u. .s.h.o.p. .a. .d.i.f.f.e.r.e.n.t. .t.y.p.e. .o.f. .c.r.e.d.i.t.…
A: Credit is available through credit cards for a variety of purchases and transactions, giving…
Q: The 7 million lira deed (bill) remaining 75 days to maturity date has been discounted with 16%…
A: A T-bill is a government backed security that trades at a price lower than the face value. At…
Q: Four years ago, Dorothy Stills bought six-year, 5.3 percent coupon bonds issued by the Sandhill…
A: Given data:> Face value = 1000> Periods = 4> Coupon amount = 1000*5.2% = 52> Price =…
Q: ABC Company has publicly traded $1,000 par value, 6% semiannual coupon bonds which mature in 16…
A: Yield to maturity dictates the internal rate of return being earned by the investor who purchases…
Q: Consider the following bonds: (Click on the following icon in order to copy its contents into a…
A: Here,BondCoupon rateMaturity (years)Yield to maturityFace value of the bondYield to…
Q: Consider a no-load mutual fund with $200 million in assets and 11 million shares at the start of the…
A: Total assets at the start of year=$200 millionTotal assets at the end of year=$410 millionNumber of…
Q: Cushing Corporation is considering the purchase of a new grading machine to replace the existing…
A: We will first compute the after-tax cash inflow from the sale of the old asset. Then we will deduct…
Q: You just deposited $6,300 in a retirement account and expect to earn an average return of 6.3…
A: Data given:PV=$6300Rate=6.3% (assumed annual compounding)n=30 yearsIf deposited 8 years…
Q: The following table presents information on a potential project currently being evaluated by XYZ.…
A: Payback period is the number of years in which the initial cost of the project is recovered.Net…
Q: Sean's investment of $81,400.00 in a fund matured to $155,777.80 in 8 years. If the interest in the…
A: The periodic interest rate refers to the return that the investment provides for each period. The…
Q: When establishing the pricing of a variable (floating) rate loan to a particular client, which…
A: Floating Rate of Interest refers to variable rate or interest rate which changes periodically.…
Q: The projects are equally risky, and their WACC is 10%. What is the MIRR of the project that…
A: MIRR stands for Modified Internal Rate of Return. Modified internal rate of return (MIRR) can be…
Q: ! Required information An engineer calculated the PW values for four alternatives to develop a…
A: PW method is a that uses discounting techniques. It applies a decision criteria for selection or…
Q: Draiman Corporation has bonds on the market with 13 years to maturity, a YTM of 9.9 percent, a par…
A: Here,Price of Bond is $950Par Value of Bond is $1,000YTM is 9.90%Time to Maturity is 13 years
Q: Gluon Incorporated is considering the purchase of a new high pressure glueball. It can purchase the…
A: Equivalent annual cost represents the cost of an asset incurred relating to operating &…
Q: A large profitable corporation bought a small jet plane for use by the firm's executives in January.…
A: The MACRS depreciation percentages for the 5-year property class are as follows:Year 1: 20.00%Year…
Q: Wellington Seafood Company would like to sell 4,000 shares of stock to acquire its competitor Kapiti…
A: Accepting price is 28.55 (The way it works is start from the highest price and keep on lowering the…
Q: E.v.a.l.u.a.t.e. .t.h.e. .d.i.f.f.e.r.e.n.t. .t.y.p.e.s. .o.f. .c.r.e.d.i.t. .c.a.r.d.s. .i.n.…
A: In the Philippines, there are several types of credit cards available, each offering different…
Q: Waldron Inc. issued $400,000 bonds with a stated rate of 7% when the market rate was 5%. They are…
A: Bonds are commonly used by investors to generate income and diversify their investment portfolios.…
Q: According to MM propositions, levered firms have a higher value because of interest tax shield. Who…
A: Income taxes is one of the important expense being incurred and captured by the business. Interest…
Step by step
Solved in 3 steps
- Q1. What is a mutual fund? In what sense is it a financial institution?. Q2. How is the net asset value (NAV) of a mutual fund determined? What is meant by the term marked-to-market daily? Q3. An investor purchases a mutual fund for $50. The fund pays dividends of $1.50, distributes a capital gain $2, and charges a fee of $2 when the fund is sold on year for $52.50. What is the net rate of return from this insurance? Formula for Question 3: Net gain = Dividend + capital gain + profit from fund sold – feeAn investor purchases a mutual fund for $50. The fund pays dividends of $1.50, distributes a capital gain $2, and charges a fee of $2 when the fund is sold on year for $52.50. What is the net rate of return from this insurance?If a mutual fund's net asset value is $23.60 and the fund sells its shares for $25.30, what is the load fee as a percentage of the net asset value?
- An investor has $80,000 to invest in a CD and a mutual fund. The CD yields 6% and the mutual fund yields 5%. The mutual fund requires a minimum investment of $9,000, and the investor requires that at least twice as much should be invested in CDs as in the mutual fund. How much should be invested in CDs and how much in the mutual fund to maximize the return? What is the maximum return?An investor has $80,000 to invest in a CD and a mutual fund. The CD yields 8% and the mutual fund yields 7%. The mutual fund requires a minimum investment of $9,000, and the investor requires that at least twice as much should be invested in CDs as in the mutual fund. How much should be invested in CDs and how much in the mutual fund to maximize the return? What is the maximum return? To maximize income, the investor should place $ in CDs and $ in the mutual fund. (Round to the nearest dollar as needed.)Mutual Fund A charges an annual management fee of 2.38% of money under management. The corresponding management fee for Mutual Fund B is 1.65%.On the same invested amount, what percentage more fees will you pay to Fund A than to Fund B? (Round your answer to 2 decimal places.)Percentage = %
- An investor has $80,000 to invest in Certificates of Deposit (CD) and a mutual fund. The CD yields 7% and the mutual fund yields 8%. The mutual fund requires a minimum investment of $8,000 and the investor requires at least twice as much should be invested in CDs as in the mutual fund. How much should be invested in each to maximize the return? What is the maximum return? Show your work and explanations setting this problem up. Variables should clearly be defined. Show all your work.D3) Finance You invest in a mutual fund that charges a 3% front-end load, 1% operating costs, and a 1% 12b-1 fees. What are the total fees in year 1 on an initial investment of $20,000 with 10% annual growth in fund's asset value, or NAV? Note that "initial investment" means it is before the deduction of frontend load.If a mutual fund's net asset value is $24.00 and the fund sells its shares for $25.20, what is the load fee as a percentage of the net asset value? Round your answer to two decimal places. %
- Suppose that a mutual fund agent approaches you and promote a fund which allows you to withdraw money from your Employment Provident Fund (EPF) to invest. From the analysis of the agent, the fund expected to pay up to 11% return, and you know that EPF paid an average 6% return and treasury’s return fixed at 2.75%. Based on the discussion in this chapter and in your opinion, are you going to take the investment? Justify your answerYou are considering an investment in a mutual fund with a 5% load and an expense ratio of 0.5%. You can invest instead in a bank CD paying 3% interest. Required: a. If you plan to invest for 4 years, what annual rate of return must the fund portfolio earn for you to be better off in the fund than in the CD? Assume annual compounding of returns. b. What annual rate of return must the fund portfolio earn if you plan to invest for 6 years to be better off in the fund than in the CD? c. Now suppose that instead of a front-end load the fund assesses a 12b-1 fee of 0.75% per year. What annual rate of return must the fund portfolio earn for you to be better off in the fund than in the CD? Note: Do not round intermediate calculations. Round your answers to 2 decimal places. a. Annual rate of return b. Annual rate of return c. Annual rate of return % % %You are considering an investment in a mutual fund with a 5% load and an expense ratio of 0.75%. You can invest instead in a bank CD paying 3% interest. Required: a. If you plan to invest for 3 years, what annual rate of return must the fund portfolio earn for you to be better off in the fund than in the CD? Assume annual compounding of returns. b. What annual rate of return must the fund portfolio earn if you plan to invest for 6 years to be better off in the fund than in the CD? c. Now suppose that instead of a front-end load the fund assesses a 12b-1 fee of 0.50% per year. What annual rate of return must the fund portfolio earn for you to be better off in the fund than in the CD? Note: Do not round intermediate calculations. Round your answers to 2 decimal places.