ou have invested P100,000 in a mutual fund that promises to pay 8% each year. You will keep this for 10 years and then cash out the total value. The cost to close the mutual fund account by then is expected to be P5,000. If your minimum return from this investment is 7%, compute for your cost of illiquity with regard to the investment.
Q: A variant of the Glosten-Milgrom model. The underlying stock can take on one of three values: V < V…
A: The variant of the Glosten-Milgrom model described involves an informed trader, uninformed traders,…
Q: You are given two options to settle a loan. Option A requires you to pay $1,250 in 7 months and…
A: The concept of TVM refers to the fact that the same amount earned earlier has more value as money…
Q: There are three securities in the market whose return on market portfolio yield the following…
A: In regression analysis, the term "yield" typically refers to the dependent variable or the variable…
Q: Which of the following statements regarding bonds is most accurate? A. Eurobonds are international…
A: One way to classify bonds is based on where and how they are issued and traded. This leads us to…
Q: You are considering a project which requires $185,000 in external financing. The flotation cost of…
A: Required External Financing = $185,000Cost of Equity = 6.5%Cost of Debt = 2.8%Debt-Equity ratio =…
Q: EMU is in a bidding war with WMU to acquire Ypsi. • The current price of Ypsi stock = $65/share .…
A: Bidding refers to the process of selling an asset or even firm where prospective purchasers submits…
Q: Question 1. Suppose a firm uses its company cost of capital to evaluate all of its projects. Will it…
A: The cost incurred by the firm when it wants to raise additional funds in the market is the…
Q: The price of $100 par-value T-bond maturing in 15 years and paying a 7% coupon is 130. The bonds…
A: Underlying Asset: In the case of a Treasury bond futures contract, the underlying asset is the…
Q: Mary Green, who works as a manager at the Sea Breeze Restaurant, is analyzing service problems that…
A: The focus of the initial corrective action is likely to be on preparing of food. customers are…
Q: A-Rod Manufacturing Company is trying to calculate its cost of capital for use in making a capital…
A: The growth rate in dividends, often referred to as the dividend growth rate, is a financial metric…
Q: . Suppose the index model for stocks A and B is estimated with the following results: rA = 2% +…
A: Variance is a statistical measure that quantifies the dispersion or spread of a set of data points…
Q: Colours Corporation is considering investing in one of two projects – Blue or Green. The initial…
A: Cash FlowProject BlueProject GreenInitial Cost1,000,0001,080,000Net Cash InflowsYear…
Q: Pacific Fixed Income Pension Fund is managing its business in another country and needs tob convert…
A: Calculating the new delivery price, K2, for the forward contract when rolling it forward from time…
Q: You have the following set of securities you are considering. Please calculate the "best" investment…
A: CAL means Capital Allocation Line. The capital allocation line helps investors in determining as to…
Q: An initial deposit of $9000 is made into an account now, and a second deposit of $21000 is made into…
A: Compounding frequency is the number of times a sum of money earns a quoted nominal interest in a…
Q: A 1-year corporate bond will pay the following: 1. The promised amount of $10,000, with probability…
A: Default Premium:The default premium is the additional return that investors demand to compensate for…
Q: You are the CFO for Play Now sports and you have 2 different machines to consider for purchase. The…
A: YearsMachine IstMachine 2ndInitial…
Q: A stock portfolio has an expected return of 11.50% and a standard deviation of 19.75%. A bond…
A: Standard deviation is the measure of deviation from the mean return and is considered as the measure…
Q: You currently have a balance of $9,000 and you pay an interest rate of 17% per year on the card.…
A: The outstanding balance is $9,000The interest rate is 17% per yearThe minimum payment is 3%The time…
Q: If Kevin changes the dividend policy from a low-dividend-payout policy to a high-dividend-payout…
A: Return can be generated to a shareholder through dividends and capital gain.
Q: DVR Inc. can borrow dollars for five years at a coupon rate of 2.84 percent. Alternatively, it can…
A: Cash flow (CF) is the change in the quantity of money that a company, institution, or person has.…
Q: Skis are listed by a manufacturer for $860, less trade discounts of 35% and 17%. What further rate…
A: This is a case of three successive discounts.Successive discounts means discount on the discount.We…
Q: The budgeted transactions of Beacon Limited for the quarter ending 31 December 2021 are as follows:…
A: To prepare the schedule showing the total budgeted amounts that Beacon Limited expects to receive…
Q: Consider a single-index model economy. The index portfolio M has E(RM ) = 6%, σM = 18%. An…
A: The index portfolio M has E(RM ) = 6%, σM = 18%.An individual asset i has an estimate of βi = 1.1…
Q: 4. The Scampini Supplies Company recently purchased a new delivery truck. The new truck has an…
A: NPV is the capital budgeting technique used to evaluate the capital expenditure and the investment…
Q: The company SML previously issued a series of 12-year bonds that pay annual coupons. The bonds have…
A: The current price of a bond is equal to the present value of coupon payments and the present value…
Q: Moby Dick Corporation has sales of $4,920,229; income tax of $574,192; the selling, general and…
A: firm’s after-tax cash flow from operations= sales - cost of goods sold - selling, general and…
Q: Pls help ASAP
A: Determining the actual cash value of a building is a crucial process often undertaken in insurance…
Q: Question 19 Pinks Co. is considering a project with an initial cost of $5 million. The project will…
A: With the help of NPV Investors can assess the financial attractiveness of a possible project before…
Q: .Langara Woodcraft borrowed money to purchase equipment. The loan is repaid by making payments of…
A: A mortgage is a type of loan that is taken out to purchase property, usually real estate. The…
Q: The spot rate is $0.51/CAD1. Platinum Bank undertakes arbitrage transactions in CAD using a sum of…
A: Exchange Rates: The spot exchange rate is the current rate at which one currency can be exchanged…
Q: Emily has borrowed $1 000 000 from MQ Bank for 10 years at an interest rate of /2=4.91% p.a. She…
A: Loans refer to contracts between parties where money is forwarded by one party to the other on the…
Q: ng a three-year project to build lasers for tattoo removal. The project will require upfront…
A: Net present value is time value based capital budgeting and can be found as the difference between…
Q: Problem 12-14 (Algo) Net present value method [LO12-4] Aerospace Dynamics will invest $150,000 in a…
A: NPV is a method of capital budgeting used to determine the profitability of the project by taking…
Q: How long would it take to pay off the loan if she chooses the biweekly payments option?
A: First we need to determine the loan amount using the formula below:In a normal mortgage, the…
Q: Fixed cost: Expected sales: $ 490,000 48,000 units per year However, you recognize that some of…
A: Net present value is the most used capital budgeting method based on the time value of money and can…
Q: You are saving for a new car. You place $14,200 into an investment account today. How much will you…
A: Future value refers to the monetary worth of an investment or cash flow at a future date, assuming…
Q: You are given the following information for Smashville, Inc. Cost of goods sold: $175,000…
A: To calculate the price-book ratio, price-earnings ratio, and price-cash flow ratio, need to use the…
Q: A woman paid $99,000 down for a house and agreed to pay 18 quarterly payments of $4,900 each. If…
A: Present value of annuity formula:-PV = A * where PV = Present value of annuityA = periodic paymentsr…
Q: LOGIC COMPANY Comparative Income Statement For Years Ended December 31, 2022 and 2023 2023 2022…
A: Ratio analysis is a financial analysis technique that involves evaluating a company's financial…
Q: of $0.8100/NZS traded at a premium of $0.0192 per NZS and with an expira date three months from now.…
A: Consider an America Call Option on New Zealands Dollars ( NZ$) with strike price of $0.8100/ NZ$…
Q: Pertinent information for two alternatives A and B is shown below. If i=10%/year and income tax rate…
A: Companies invest money in projects in the hope there will be cash flows from the project in the…
Q: You have just purchased a municipal bond with a $10,000 par value for $9,500. You purchased it…
A: A municipal bond is a type of bond issued by a local government or municipality to finance public…
Q: A pension fund manager has invested assets in a 30-year bond paying a coupon of 5% p.a. An upward…
A: The plot of different yields of different bonds that have equal quality of credit but different…
Q: You work for a firm that is offering a new retirement for employees. The insurance fund estimates…
A: PV = Present Value (what we want to find) FV = Future Value ($7,500,000) r = Interest rate (7% or…
Q: A property was purchased for $5591.00 down and payments of $1049.00 at the end of every month for 7…
A: Finance cost is the amount paid above the loan taken for the property and it depends on the interest…
Q: Find the total monthly payment for the mortgage, property tax, and fire insurance
A: Monthly housing expenses include the payment for mortgage, payment for insurance and payment for…
Q: If a hat costs $4.20 after a 40% discount, what was its original price?
A: Discount means reduction in sales price of the product which is being sold to customer. It can be…
Q: Estimate a reasonable intrinsic stock price per share as of 01/01/2023 for private Manufacturing…
A: The intrinsic value of the company is determined using discounted cash flow approach where we need…
Q: Assume that there are two factors that price assets. Interest rate rf = 4%. You have the following…
A: Here,Risk Free Rate is 4%AssetE(r)Beta of Factor 1Beta of Factor 2115%1.51212%`10.8
You have invested P100,000 in a mutual fund that promises to pay 8% each year. You will keep this for 10 years and then cash out the total value. The cost to close the mutual fund account by then is expected to be P5,000. If your minimum
Step by step
Solved in 3 steps with 3 images
- You have invested P100,000 in a mutual fund that promises to pay 8% each year. You will keep this for 10 years and then cash out the total value. The cost to close the mutual fund account by then is expected to be P5,000. If your minimum return from this investment is 7%, compute for your valuation of the mutual fund.You have invested P100,000 in a mutual fund that promises to pay 8% each year. You will keep this for 10 years and then cash out the total value. The cost to close the mutual fund account by then is expected to be P5,000. If your minimum return from this investment is 7%, compute for your cost of illiquity with regard to the investment. (complete and clear solution)You have invested P100,000 in a mutual fund that promises to pay 8% each year. You will keep this for 10 years and then cash out the total value. The cost to close the mutual fund account by then is expected to be P5,000. If your minimum return from this investment is 7%, compute for your valuation of the mutual fund. (complete and clear solution)
- An investment pays you $100 at the end of each of the next 3 years. The investment will then pay you $200 at the end of year 4, $300 at the end of year 5, and $500 at the end of year 6. If the rate of interest earned on the investment is 8%, what is the present value of this investment? What is its future value? How do you solve this with excel?An investment promises to pay $5,000 at the end of each year for the next four years and $3,000 at the end of each year for years 5 through 8. Use Table II and Table IV or a financial calculator to answer the questions. Round your answers to the nearest cent. If you require a 9 percent rate of return on an investment of this sort, what is the maximum amount you would pay for this investment?$ Assuming that the payments are received at the beginning of each year, what is the maximum amount you would pay for this investment, given a 9 percent required rate of return?$An investment promises to pay $6,000 at the end of each year for the next three years and $4,000 at the end of each year for years 4 through 7. Use Table II and Table IV or a financial calculator to answer the questions. Round your answers to the nearest cent. If you require a 11 percent rate of return on an investment of this sort, what is the maximum amount you would pay for this investment?$ Assuming that the payments are received at the beginning of each year, what is the maximum amount you would pay for this investment, given a 11 percent required rate of return?$
- Assume that investing $500 in a fund today will give you a return of $530 a year later. On the other hand, your bank can give you a rate of interest of 7.5% compounded annually. Will you choose to invest in the fund?Today, you invest a lump sum amount in an equity fund that provides an 12% annual return. You would like to have $10,900 in 6 years to help with a down payment for a home. How much do you need to deposit today to reach your $10,900 goal? Do not round intermediate calculations. Round your answer to the nearest cent.You plan to invest $13223 into an investment that you hope will earn a return of 10.28 % . You will withdraw your money in 24 years. How much will you withdraw?
- An investment promises to pay $7,000 at the end of each year for the next six years and $3,000 at the end of each year for years 7 through 10. Use Table II and Table IV or a financial calculator to answer the questions. Round your answers to the nearest cent. If you require a 15 percent rate of return on an investment of this sort, what is the maximum amount you would pay for this investment?$ Assuming that the payments are received at the beginning of each year, what is the maximum amount you would pay for this investment, given a 15 percent required rate of return?$You are planning to contribute $8,000 a year into a mutual fund that earns an average of 8% per year. If you continue to contribute for the next 10 years, how much would you have in your account?If you invest P5,000 in a mutual fund extending a total annual return of 8% and you re-invest the proceeds each year, what will be the value of your investment after five years?