Finance Questions
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AAA Corp. has a current stock price of $30 per share, is expected to pay a dividend of $1.20 in one year, and its expected price right after paying that dividend is $33.AAA's expected dividend yield is closest to
A zero bond with a face value of $100,000 has a yield to maturity of 4%, and 6 years to maturity. Calculate the bond's duration (in years).
If the interest rate is r=0.11, what is the present value annuity factor for an annuity of 17 years?
Given the following data for Project AAA:Initial investment = 200Real cash flow year 1 = 150Real cash flow year 2 = 100Real discount rate = 5%Nominal discount rate = 10%Calculate the NPV
Which of the following statements about the relationship between interest rates and bond prices is true?There is an inverse relationship between bond prices and interest ratesThe price of long-term bonds fluctuates more than the price of short-term bonds for a given change in interest rates. (Assuming that the coupon rate is the same for both)There is a positive relationship between bond prices and interest ratesThe price of short-term bonds fluctuates more than the price of long-term bonds for a given change in interest rates. (Assuming that the coupon rate is the same for both)There is no relationship between bond prices and interest rates
Rearden Metals has a current stock price of $30 share, is expected to pay a dividend of $1.20 in one year, and its expected price right after paying that dividend is $33.Rearden's expected dividend yield is closest to:
XYZ Inc is contemplating issuing a 50-year bond with semiannual coupons, a coupon rate of 7%, and a face value of $1000. XYZ believes it can get a BBB rating from Standard and Poor's for this bond issue. If XYZ is successful in getting a BBB rating, then the issue price for these bonds would be closest to
Which of the following statements are wrong?Managers in Germany generally think that shareholders rights are more important than the rights of the workforce.Managers in countries such as Japan and France generally think that a company's owners are only its shareholders.Managers in the U.S. generally think that the workforce is the most important owner of the firm, shareholders are much less important.Managers in the U.K. would generally prefer cutting dividends to laying off employees.
You would like to have enough money saved to receive a per year perpetuity of 90426 after retirement so that you and your family can lead a good life. How much would you need to save in your retirement fund to achieve this goal if you retire today? Assume that the perpetuity payments start one year after the day of retirement! The interest rate is 8%.
AAA Company is considering investing in a new project. The project will need an initial investment of 1926657 and will generate 1200000 (after-tax) cash flows for three years. Calculate the NPV for the project if the cost of capital is r=0.11
If the present value of $350 expected to be received one year from today is $340, what is the discount rate?
Assume you are drafting cash flow projections for a project. Which of the following statements are correct?A higher cost of capital can turn the project into a negative NPV project.Taxes are a cash flow and depend on depreciation, although depreciation itself is not a cash flow.The method of depreciation you use can and usually will have an impact on the NPV you obtain for the project.If the project has negative NPV, you should implement it.Cost of capital for this project is identical to all other projects.You can safely ignore any salvage value at the end of the project.You cannot ignore inflation. Instead, you have to obtain real cash flows first, and then discount them at nominal rates.
Sales = 3240; Cost of good sold = 1562; Average receivables = 249, calculate the average collection period
An initial investment of $400,000 will produce an end of year cash flow of $480,000. What is the NPV of the project at a discount rate of 2%?
Long term bank debt=117, Long term leases=39, Book value of equity=127, Market value of equity=166.Calculate the debt-equity ratio
In a corporation, the ultimate decisions regarding business matters are made by
Sales = 3834; Cost of good sold = 1595; Average receivables = 147, calculate the average collection period
Given a book value per share of $55.37 and a market value of $37.35, what is the market capitalization of a firm with 3089705 outstanding shares?
Conflicts of interest between the bondholders and shareholders of a firm result in
ales = 3246; Cost of goods sold = 1537; Average total assets = 1692; Average inventory = 228, calculate the days in inventory