1-At the beginning of last year, you invested $4,000 in 80 shares of the Chang Corporation. During the year, Change paid dividends of $5 per share. At the end of the year, you sold the 80 shares for $59 per…
Kate Greenway Corporation, having recently issued a $20,113,000, 15-year bond issue, is committed to make annual sinking fund deposits of $610,000. The deposits are made on the last day of each year and yield a return of 10%. Will the…
You ran a little short on your spring vacation, so you put a $1,500 on your credit card. You can only afford to make the minimum payment of $30 per month. The interest rate on the card is 1.5% per…
JR Industries has a $20 million loan due at the end of the year and under its current business strategy its assets will have a market value of only $15 million when the loan comes due. JR is considering a…
What is the value of a bond that matures in 18 years, makes an annual coupon payment of $110, and has a par value of $1000? Assume a required rate of return of 7%, and round your answer to the…
Demonstrate to your colleagues how you would calculate the expected rate of return also called r-hat, and Beta on a self-designed portfolio of four common stocks selected from the NASDAQ or NYSE stock exchanges. Assume the weighting of the portfolio…
Susan owns a Van Gogh painting valued at $10 million. In addition to the painting, Susan owns approximately $15 million of other assets. For estate planning purposes, Susan has given the painting to the Van Gogh museum in Amsterdam with…
Consider the data in the table below.Contract EURIBORSept 2011 LIFFE Euribor STIR Future 99.35Dec 2011 LIFFE Euribor STIR Future 99.05 a) If you were to purchase 10 Sept 2011 Euribor futures at 99.35 and sell them at 99.40 three days…
1. What are the two possible components of new common equity (and hence two possible costs of common equity)? Which one is normally relevant, and why is this so? Is the relevant cost of debt when calculating the WACC the…
The board of Directors of Pastrana, Inc. is negotiating the purchase of Burgos’ Galleries. The balance sheet @ 12/31/2009 of Burgos’ is presented below: Assets Liabilities & Stockholder’s Equity Cash $ 70,000 Notes Payable $ 50,000Land $ 100,000 Account Payable…
