Suppose you buy 100 shares of Abolishing Dividend Corporation at the beginning of year 1 for $80. Abolishing Dividend Corporation pays no dividends. The stock price at the end of year 1 is $100, the price is $120 at the end of year 2, and the price is $150 at the end of year 3. The stock price declines to $80 at the end of year 4, and you sell your 100 shares. For the four years, your geometric average return is O 0.0% 5.7% 9.2% 34.5%
Q: The company expects to invest approximately $1 million in three months in corporate bonds. The…
A: Investment amount = $1,000,000Contract size (assuming a standard Treasury bond futures contract of…
Q: Fill in the table using the following information. Assets required for operation: $4,000 Case A—firm…
A: If the company uses some proportion of assets by borrowing funds or debt then such a company is…
Q: Suppose you purchase a $1,000 TIPS on January 1, 2024. The bond carries a fixed coupon of 2 percent.…
A: Coupon payment refers to an amount that is paid by the bondholder to the issuer of the bond at every…
Q: Choices Are: Accept or Reject
A: See the answer image in the explanation field.Explanation:Answer image:
Q: Everest Inc. is presently enjoying relatively high growth because of a surge in the demand for its…
A: Value of stock can be found by dividend discount model as the present value of dividend and present…
Q: Management believes it can sell a new product for $9.00. The fixed costs of production are estimated…
A: Filling the Production Cost Table:QuantityTotal RevenueVariable CostsFixed CostsTotal CostsProfits…
Q: A company has $54,000 today to invest in a fund that will earn 4% compounded annually. How much will…
A: Future value factor at 4.0% for 6th year is 1.265319
Q: Please use a financial calculator to solve. Be sure to list your steps. You are evaluating two…
A: The projected value that an asset will have when its useful life comes to an end and it can no…
Q: Class], [Year, Three-Year, Five-Year, Seven - Year ],[1,33.33%, 20.00 %, 14.29% The asset has an…
A:
Q: Under normal conditions, which of the following would be most likely to increase the coupon rate…
A: The objective of the question is to identify which of the given options would most likely increase…
Q: In 2020, Appalachian Airlines had taxable income of -$3,000,000. In 2021, the company has taxable…
A: The objective of the question is to calculate the tax payable by Appalachian Airlines in 2021,…
Q: You are trying to decide between two mobile phone carriers. Carrier A requires you to pay $185 for…
A: Equivalent Annual Annuity (EAA) is a financial metric used to evaluate investment alternatives by…
Q: To provide for the automation of a production process in six years, Invista is starting a sinking…
A: Amount required = $800,000Interest rate = 6.4% compounded monthlyNumber of years = 6To find:…
Q: 5.Please answer all the tables in their entirely
A: Requirement 1$ millions2019Adjusted (total) allowance allowance for sales returns$2,570 Requirement…
Q: Thank you!
A: Net Interest PaymentsYear 1$0.76 millionsYear 2$0.70 millionsYear 3$0.68 millionsExplanation:Step…
Q: Which type of financing involves less risk for the firm?
A: Given information,assets required for operation: $9,800Firm A uses only equity financingFirm B uses…
Q: What will the free cash flow for this project be in year 2?
A: The free cash flow is the money that remains after a person pays all of their bills and expenses. It…
Q: You are in negotiations to make a 7-year loan of $ 45,000 to Deville Corporation. To repay you,…
A: The loans that are made out to other companies and individuals are usually recovered in the form of…
Q: A firm is considering two mutually exclusive projects, X and Y, with the following cash flows: 0 1 2…
A: 13.70% is the MIRR of the project that maximizes shareholder value.Explanation:Step 1: The…
Q: Which of the following statements is CORRECT? a. Most business in the U.S. is conducted by…
A: The objective of the question is to identify the correct statement among the given options related…
Q: You are considering an investment in Justus Corporation's stock, which is expected to pay a dividend…
A:
Q: kjmlkrrrrrr
A: See the answer image in the explanation field.Explanation:Answer image:
Q: A hedge fund with $4.4 billion of assets charges a management fee of 1.5% and an incentive fee of…
A: Assets under management (In million)$4,400.00 millionManagement fees1.5%Incentive fees10%Money…
Q: The composition of the Fingroup Fund portfolio is as follows: Stock Shares Price A 200,000 $ 33 B…
A: A portfolio is a mixture or group of financial products or assets, such as stocks, bonds,…
Q: The value of equity in a firm is $6 million and its annual volatility is 40%. All the firm's debt is…
A: 1. Debt Value = Face Value / (1 + Risk-Free Rate)^Time Period2. Asset Value = Equity value + Debt…
Q: If Alvin invest 5500 to day in a saving account. The money will grow to 8500 at the end of the year…
A: The effective annual rate of the investment is 11.50%. So, 3rd option is the correct…
Q: KO just paid a dividend of $8 per share. Analysts expect its dividend to grow at 27% per year for…
A: Just paid dividend (D0) = $8Growth rate for first 3 years (g3) = 0.27Growth rate after 3 years (g) =…
Q: A stock is currently priced at $38 and will move up by a factor of 1.3 or down by a factor of 0.51…
A: Data givenUp-move factor for next 2 periods = u = 1.3Down-move factor for next 2 periods = d =…
Q: Use the following amortization chart: Selling price of home Down payment $ 5,000 Principal (loan) $…
A: Interest cost refers to an amount that is paid at every period along with the principal amount until…
Q: J.S. Treasury STRIPS, close of business February 15, 2019: Maturity Feb 2020 Feb 2021 Price 97.123…
A: Current year2019Face value$100.00STRIPSMaturityPriceFeb 2020 STRIPS2020$97.123Feb 2021…
Q: A washer-dryer combination can be purchased from a department store by making monthly credit card…
A: Monthly payment refers to an amount that is paid at every month by the borrower to the lender at a…
Q: Based upon the information below, what is the value of the company as of 1/1/2021 (use the APV…
A: Here,…
Q: Compute the NPV statistic for Project appro percent. (Negative amount should be indicated by a minus…
A: Net Present Value (NPV) is a financial tool that measures the attractiveness of a project or…
Q: Marissa Manufacturing is presented with the following two mutually exclusive projects. The required…
A: IRR (Internal Rate of Return) and NPV (Net Present Value) are critical in investment appraisal. A…
Q: You are planning your retirement in 10 years. You currently have $179,000 in a bond account and…
A: The annual withdrawals can be found by using the PMT formula in the excel sheet where the PV of…
Q: Una Day is planning to retire in 14 years, at which time she hopes to have accumulated enough money…
A: Time till retirement: 14 YearsAnnuity amount after retirement: $17,000Years of annuity: 19…
Q: Suppose you just won the state lottery, and you have a choice between receiving $2,625,000 today or…
A: The objective of this question is to find out the rate of return that is built into the annuity.…
Q: Paolo and Sharon Ferrari have completed Step 1 of their needs analysis worksheet and determined that…
A: The objective of the question is to calculate the additional life insurance needed by Paolo and…
Q: Assume the following information: Quoted Bid Price Quoted Ask Price Value of a Brazilian real (BRL)…
A: Trinagular arbitrage profit can be made by selling one currency and buying another currency via…
Q: need answer in step by step
A: b.Current price of bond$579.77Explanation:Step 1:In excel: AB1Face value10002Compounding in…
Q: The common stock of the C.A.L.L. Corporation has been trading in a narrow range around $90 per share…
A: Share price = $90Price of 6- month put option = $7Exercise price = $90Semi-annual risk-free rate =…
Q: 1. Jenny puts $200 into a months. What would you
A: Future value refers to the value of a current asset at some future date affected by interest rate,…
Q: Your firm is contemplating the purchase of a new $570,000 computer-based order entry system. The…
A: IRR refers to the Internal Rate of Return..It is the discount rate at which the Net Present Value…
Q: Universal Electronics is considering the purchase of manufacturing equipment with a 10-year midpoint…
A: Net Present Value (NPV) is a financial measure utilized to assess the profitability of an investment…
Q: Bond Terms Par Value Duration (yrs) Coupon Frequency Current rates: $1,000 5 4.25% Semiannual 5.00%
A: Bond duration refers to the measurement of the sensitivity of price in respect to the changes in the…
Q: You have the following information: t1 t2 t3 t4 TSLA Returns 0.05 -0.04 0.1 -0.01 Market Returns 0…
A: The objective of the question is to calculate the covariance between the returns of TSLA and the…
Q: (Related to Checkpoint 9.3) (Bond valuation) Pybus, Inc. is considering issuing bonds that will…
A:
Q: Consider the following spot interest rates for maturities of one, two, three, and four years. r1 =…
A: The pure expectations theory assumes that investors do not consider long-term bonds to be riskier…
Q: The corporate valuation model, the price-to-earnings (P/E) multiple approach, and the economic value…
A: Free Cash Flow tells the amount of cash generated by a company. In short a free cash flow gives the…
Q: In 2020, Caterpillar Incorporated had about 540 million shares outstanding. Their book value was…
A: (a) Therefore, the Caterpillar's book debt-to-value ratio= 0.58 ( Round to two decimal places).…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 7 images
- 4. You decide to sell 100 shares of Topgun Enterprises Inc. short when it is selling at its yearly high of $42.25. Your broker tells you that your margin requirement is 60 percent and that the commission on the sale is $20. While you are short, Topgun pays a $0.85 per share dividend. At the end of one year you buy your Topgun shares (cover your short sale) at $44 and are charged a commission of $20 and a 5 percent interest rate. a. What is your dollar return on the investment? b. What is your rate of return on the investment?You buy 100 shares of Demolishing Dividend Corporation at the beginning of year 1 for R80. Demolishing Dividend Corporation pays no dividends. The stock price at the end of year 1 is R100, R120 at the end of year 2 and R150 at the end of year 3. The stock price declines to R100 at the end of year 4 and you sell your 100 shares. For the fours years, your geometric average return is ?you own 1,000 shares of stock in Avondale Corporation. You will receive a $2.30 per share dividend in one year. In two years, Avondale will pay a liquidating dividend of $53 per share. The required return on Avondale stock is 15 percent. What is the current share price of your stock (ignoring taxes)? If you would rather have equal dividends in each of the next two years, show how you can accomplish this by creating homemade dividends. Hint: Dividends will be in the form of an annuity. suppose you want only $750 total in dividends the first year. What will your homemade dividend be in two years?
- Suppose you purchase one share of the stock of Red Devil Corporation at the beginning of year 1 for $46.50. At the end of year 1, you receive a dividend of $2, and buy one more share for $50.50. At the end of year 2, you receive total dividends of $4 (i.e., $2 for each share), and sell the shares for $58.50 each. What is the time-weighted return on your investment? (Round your answer to 2 decimal places. Do not round intermediate calculations.)You buy 100 shares of stock for $50 per share. The stock pays a dividend of $2 per share per year. That dividend is not reinvested. After 5 years, if you sell your shares for $50 per share, what is the total percentage return that you earned? (Round your answer to the nearest whole number, if necessary)You own 1,000 shares of stock in Avondale Corporation. You will receive a $2.30 per-share dividend in one year. In two years, Avondale will pay a liquidating dividend of $53 per share. The required return on Avondale stock is 15 percent. What is the current share price of your stock (ignoring taxes) ? If you would rather have equal dividends in each of the next two years, show how you can accomplish this by creating homemade dividends. Hint : Dividends will be in the form of an annuity Thanks :)
- You decide to sell short 100 shares of Github Industries when it is selling at its yearly high $56. Your broker tells you that your margin requirement is 45 % and that the commision on the purchase is $155. While you are short the stock, Github pays a $2.50 per share dividend. At the end of one year, you buy 100 shares of Github at $45 to close out your position and are charged a commision of $145 and 8 % interest on the money borrowed. What is your rate of return on the investment?You purchase one share of Coca Cola stock for $100 at the beginning of Year 1 and get the dividend of $3 at the end of Year 1. You purchase another share of Coca Cola stock for $90 at the beginning of Year 2. At the end of Year 2, you receive the dividend income of $6 for two shares ($3 for each share) and sell two shares for $85. What is the time-weighted return? -9.54% -4.64% 0.9536% 5.0% 13.4%An investor buys one share of stock for $100. At the end of year one she buys three more shares at $89 per share. At the end of year two she sells all four shares for $98 each. The stock paid a dividend of $1.00 per share at the end of year one and year two. What is the investor's time-weighted rate of return? (A) 11.24%. B) 0.06%. C) 6.35%.
- You own 3,000 shares of stock in Avondale Corp. You will receive a $0.85 per share dividend in one year. In two years, Avondale will pay a liquidating dividend of $47 per share. The required return on Avondale stock is 12 percent. (Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.) What is the current share price of your stock (ignoring taxes)? Share price If you would rather have equal dividends in each of the next two years by creating homemade dividends, what would be the cash flow for Year 1 and Year 2? Year 1 cash flow Year 2 cash flow $ $You own 200 shares of Shamrock Enterprises that you bought at $25 a share. The stock is now selling for $45 a share.a. You put in a stop loss order at $40. Discuss your reasoning for this action. b. If the stock eventually declines in price to $30 a share, what would be your rate of re-turn with and without the stop loss order?You own 1,000 shares of stock in Avondale Corp. You will receive a $.80 per share dividend in one year. In two years, Avondale will pay a liquidating dividend of $45 per share. The required return on Avondale stock is 10 percent. a. What is the current share price of your stock (ignoring taxes)? b. If you would rather have equal dividends in each of the next two years by creating homemade dividends, what would be the cash flow for Year 1 and Year 2?