QUESTION The following table summarizes prices of various default-free zero-coupon bonds (expressed as a percentage of face value):Maturity (years) 1 2 3 4 5Price (per $100 face value) 94.52 89.68 85.40 81.65 78.3521)The yield to maturity for the two year zero-coupon bond is closest to:21)______A)5.6%B)6.0%C 21) According to the given information,Face value of the bond […]
QUESTION Revenue and cost per passenger mile are two key performance metrics for the airline industry. Do a small research online and summarize in 150 words the importance of the measures and their values for some of airlines. Revenue measures how much an airline takes in. This is perhaps the single most critical performance metric, […]
QUESTION The process of renewing a drivers license at the Archer County Courthouse has the follow steps: 1) a clerk fills out an application form, 2) the clerk takes a picture of the driver, 3) a typist types and processes the new license. It takes an average of five minutes to fill out an application […]
QUESTION Total Assets $800,000Current Liabilities $150,000Long-term Liabilities $120,000Preffered Stock Obligation $65,000# of common stock outstanding 30,000Earnings available to common $48,000P/E Ratio 20My answer to the solutionTotal Assets $800,000Current Liabilities $150,000Long-term Liabilities $120,00 Book value per share is (Assets minus liabilities- preferred)/common shares outstanding). 800,000-150,000-120,000-65,000= 465,000/30,000= $15.50 per share. Earnings available to common /common outstanding = […]
QUESTION The yield to maturity on a bond is the rate of return that equates the presentvalue of the bonds future cash ?ows with the bondsa. book value.b. liquidation value.c. face value.d. market value. Answer D) Market Value The yield to maturity on a bond is the rate of return that equates the present value […]
QUESTION Consider the following projects:Cash Flows ($)Project C0 C1 C02 C3 C4 C5A -1,000 +1,000 0 0 0 0B -2,000 +1,000 +1,000 +4,000 +1,000 +1,000C -3,000 +1,000 +1,000 0 +1,000 +1,000a.If the opportunity cost of capital is 10 percent, which projects have a positive NPV?b.Calculate the payback period for ea a. A. NPV = -1,000 […]
QUESTION Another client, Wynona, decides that she will invest $5,000 per year in a 6% annuity for the first ten years, then $6,000 for the next ten years, and then $4,000 per year for the last ten years, how much will she accumulate?[Hint: Treat each ten-year period as as separate annuity and compute the Fut […]
QUESTION 1. Lee Manufacturings value of operations is equal to $900 million after a recaptitalization (the firm had no debt before the recap). Lee raised $300 million in new debt and used this to buy back stock. Lee had no short-term investments before or after the recap. After the recap, wd = 1/3. The firm […]
QUESTION The required rate of return calculation has an enormous effect on the stocks price using these types of models. If we assume that Nations Banks required rate of return on its common stock is 12% instead of 13%, what would the Gordon Growth Model Stock Growth Price yieldP0 = FV(1 + i) / kj […]
QUESTION W.C. Cycling had $55,000 in cash at year-end 2007 and $25,000 in cash at year end 2008. Cash flow from long-term investing activities totaled -$250,000, and cash flow from financing totaled +$170,000If accruals increased by$25,000, receivables and inventories increased by $100,000, and depreciation If we assume cash flow from operating activities was 50,000 as […]
