A bond has a par value of $100,000 and pays interest revenues of $5,000 per year. This bond has a five-year life and a current market price of $98,000. Calculate the yield-to-maturity of this bond. (Points : 10) .3. An investor purchased call options for $2 per option.
Sample quiz 2: Fin 819 1. Super Computer Company's stock is selling for $100 per share today. It is expected that this stock will pay a dividend of 5 dollars per share, and then be sold for $120 per share at the end of one year. Calculate the expected rate of return for Super Computer Company ‘s stock. A) 20% B) 25% C) 10% D) 15% E) None of the above Answer: B Response: r = (120+5-100)/100 = 25% 2.
2. On January 1, 2007, Fire wire Company acquired 40 percent of Browser Company's common stock. For this acquisition, Fire wire paid $45,000 above book value. The full differential was attributed to equipment with a remaining life of ten years and zero salvage value at the date of acquisition. During 2007 and 2008, Browser reported net income of $90,000 and $50,000 and paid dividends of $40,000 and $60,000, respectively.
One of the components has an annual demand of 250 units, and this is constant throughout the year. Carrying cost is estimated to be $1 per unit per year, and the ordering cost is $20 per order. a) To minimize cost, how many
The employee is paid semi-monthly with an annual salary of $52,000. What should the employee’s wages be on the 9/30/12 payroll? (52,000/2080=$25, 86.67*80%=69.33hrs, $25*69.33=$1,733.33) 5. A FT-salaried employee making $60,000 per year receives a salary increase of $5,000 retroactive to 1/1/2012. The employee is paid on a semi-monthly basis.
Answer AR= 20x20000=400,000 3-2 Debt Ratio Vigo Vacations has an equity multiplier of 2.5. The company’s assets are financed with some combination of long-term debt and common equity. What is the company’s debt ratio? Answer Equity multiplier Asset /equity = 2.5/1 A=L+E 2.5=1.5=+1 Debt/asset = 1.5/2.5 = .6 3-3 Market/Book Ratio Winston Washers’s stock price is $75 per share. Winston has $10 billion in total as- sets.
$20,000*20 days outstanding= AR $400,000 3-2 Debt Ratio Vigo Vacations has an equity multiplier of 2.5. The company’s assets are financed with some combination of long-term debt and common equity. What is the company’s debt ratio? Equity Multiplier= 2.5 Asset/Equity = 2.5/1 1+1.5= 2.5 Debt/Asset= 1.5/2.5= .6 3-3 Market/Book Ratio Winston Washer’s stock price is $75 per share. Winston has $10 billion in total assets.
Answer AR= 20x20000=400,000 3-2 Debt Ratio Vigo Vacations has an equity multiplier of 2.5. The company’s assets are financed with some combination of long-term debt and common equity. What is the company’s debt ratio? Answer Equity multiplier Asset /equity = 2.5/1 A=L+E 2.5=1.5=+1 Debt/asset = 1.5/2.5 = .6 3-3 Market/Book Ratio Winston Washers’s stock price is $75 per share. Winston has $10 billion in total as- sets.
Estimate the two- and three-year LIBOR zero rates. 2. A financial institution has agreed to pay 10% per annum (with quarterly compounding) and to receive 3-month LIBOR in return on a notional principal of $100 million with payments being exchanged every 3 months. The Swap has a remaining life of 5 months. The 2-month and 5-month zero rates are 9.9% and 10.2% with continuous compounding, respectively.
DONNA URCHAK The annual sales for Salco Inc. were $4.5 million last year. The firm’s end-of-year balance sheet was as follows: Current assets $500,000 Liabilities $1,000,000 Net fixed assets $1,500,000 Owners’ equity $1,000,000 $2,000,000 $2,000,000 The firm’s income statement for the year was as follows: Sales $ 4,500,000 Less cost of goods sold (3,500,000) Gross profit $ 1,000,000 Less operating expenses (500,000) Operating income $ 500,000 Less interest expense (100,000) Earnings before taxes $ 400,000 Less taxes (50%) (200,000) Net income $ 200,000 a. Calculate Salco’s total asset turnover, operating profit margin, and operating return on assets. b. Salco plans to renovate one of its plants, which will require an added investment in plant and equipment of $1 million. The firm will maintain its present debt ratio of .5 when financing the new investment and expects sales to remain constant.