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14 Sep
2020

Problem 812 S0 b) Now, you are given the following values: N(d1) = 0.5939…

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Problem 812 S0 b) Now, you are given the following values: N(d1) = 0.5939 N(d2) = 0.5349 a) You are given the data below for pricing a European Put option. Solve for d and d. = $70.00 K = $69.00 r = 4.0% q = 0% T = 0.25 σ = 0.3 Calculate the price of the European Put Option based on the information in a) above.
A firm spends 50,000 on research assessing wether to start a project. Which of the following is correct? a) The
A firm spends 50,000 on research assessing wether to start a project. Which of the following is correct? a) The firm shouldn’t include it because it is a sunk costb) The firm shouldn’t include it because it is an opportunity costc) The firm should include it in calculating the initial investment outlay
If an acquisition does not create value and the investors in the market have figured this out, then the: A)
If an acquisition does not create value and the investors in the market have figured this out, then the: A) Earnings per share (EPS) of the acquiring firm must be the same both before and after the acquisition. B) EPS of the new firm can be greater than the previous EPS of the acquiring firm. C) Price of the acquiring firm must increase because of the growth of the firm. D) The stock price of the acquiring firm should increase if the acquisition diversifies away some of the firm’s unsystematic risk. E) The synergy of the acquisition can be negative because of the value transfer from stockholders to bondholders.
1. Allstar Company invests in a project with expected cash inflows of $9,000 per year for four years. All cash
1. Allstar Company invests in a project with expected cash inflows of $9,000 per year for four years. All cash flows occur at year-end. The required return on investment is 9%. If the project generates a net present value (NPV) of $3,000, what is the amount of the initial investment in the project? 2. A company has a current ratio of 2.0. Cash is 20%, accounts receivable is 40%, and inventory is 40% of total current assets. What is the acid-test ratio for the company? 3. Calculate the NPV of the project, assuming a 10% discount rate.
1 It is said that the entire financial fortune of the British Empire can be computed using the compound
Finance Assignment Writing ServiceQuestion 1 It is said that the entire financial fortune of the British Empire can be computed using the compound rate of [interest shown in the data table in row 4] applied to the gold that the English stole from the Spanish in the sixteenth century. If this was the case and by the year 1550 the English had stolen the amount [shown in row 1 of the data table], what would the value of the British Empire have been at its peak in 1950 assuming compounding based on annual stops?
2 (2 marks) Charlie Hebro intends to save for a house by making monthly deposits into a term savings
Question 2 (2 marks) Charlie Hebro intends to save for a house by making monthly deposits into a term savings account that earns interest at the rate [shown in row 7 of the data table], with interest compounded monthly. His budget allows him to save the monthly amount [shown in row 14 of the data table] starting at the end of this month. a) What will his savings be if he follows his plan for 5 years? b) If he receives an unexpected inheritance of $50,000 today which he deposits to start off his home savings, what will his total savings be at the end of the five years.
A European put option written on stock has strike price $12 and expires at time t = 1 . At
A European put option written on stock has strike price $12 and expires at time t = 1 . At the current time t = 0 the underlying stock has price S(0) = $8 and at expiry theprice will be either S(1; “) = $15 or S(1; #) = $7 . The interest rate over t = 0 to t = 1is r = 12 .(a) Show that there is no arbitrage opportunity.(b) Construct a replicating portfolio for this put option. Calculate H0 and H1 (asdened in lectures) for this replicating portfolio and thus nd the value of theput at the current time P(0).(c) You should nd that H0 is positive and H1 is negative, what does this mean?(d) Check your solution for P(0) by calculating the risk neutral probabilities andusing the general pricing formula.
1.A company has a net profit margin of 5%, an operating profit margin of 10%, and a gross profit margin
1.A company has a net profit margin of 5%, an operating profit margin of 10%, and a gross profit margin of 25%. Sales revenue is $5,000,000. Selling, general, and administrative expenses are $750,000. What is the cost of goods sold? 2.How will the following items affect cash flow?
Lisa M. has been asked to operate a Beaver bush plane for a mining company exploring in Yukon. Lisa will
Lisa M. has been asked to operate a Beaver bush plane for a mining company exploring in Yukon. Lisa will have a 5-year contract with the mining company. The mining company will commit to use the plane for 5 years.Lisa M. has the following choices: -Buy the plane for $500,000 -Arrange a 5-year, non-cancellable, net financial lease at a rate of $75,000 per year, paid in advanceHow would you advise Lisa M, the charter company’s CEO? Assume that the CCA rate is 25% and Lisa has many other airplanes in its asset pool. The first CCA deduction is made at the end of the first year. The company’s tax rate is 35%. The weighted-average cost of capital for the bush plane business is 14%, but Lisa can borrow at 9%.Lisa thinks the plane will be worth $300,000 after 5 years.If Lisa takes the 5-year financial lease. Lisa must cover the operating costs of the plane. Assume that the operating costs are identical whether Lisa buys or leases the plane.**Could you please show the answers and calculations in most clean and easy format? Thank you in advance
13.Suppose the interest on a foreign government bonds is 7.5%, and the current exchange rate is $0.03571/foreign currency (i.e. 28
13.Suppose the interest on a foreign government bonds is 7.5%, and the current exchange rate is $0.03571/foreign currency (i.e. 28 foreign currencies per dollar). If the forward exchange rate is $0.03508/foreign currency (i.e. 28.5 foreign currencies per dollar), and the current US risk-free rate is 4.5%, if the effective foreign risk-free rate is 6.366%. Which of the following is most likely to be correct? A) The foreign government bond is a superior investment than the US Treasury bond. B) The foreign government bond is less risky than the US Treasury bond. C) The implied country risk premium of the foreign government bond is positive. D) The fluctuation of $/foreign currency exchange rate will not affect the risk premium of the foreign government bond. E) The capital markets between the US and the foreign country must be fully integrated
Dawling Computer Systems is considering a project that has the following cash flow data. Note that a project’s IRR can
Dawling Computer Systems is considering a project that has the following cash flow data. Note that a project’s IRR can be less than the WACC (and even negative), in which case it will be rejected.a) What is the project’s NPV?b) What is the project’s IRR?c) What is the project’s MIRR?d) What is the project’s payback?e) What is the project’s discounted payback?Year 0 1 2 3 Cash flows -$1,100 $450 $470 $490

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