Problems: Easy Problems 1-6 • 5-1 Bond Valuation with Annual payments Jackson Corporation’s bonds have 12 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 8%. The bonds have a yield to maturity of 9%. What is the current market price of these bonds? 80*7.1607+1000*.3555 = $928 • 5-2 Yield to Maturity for Annual payments Wilson Wonders’s bonds have 12 years remaining to maturity.
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What is the total profit or loss to the investor? Use a risk-free rate of 4% and assume this is a European option where the stock does not pay any dividends. (Points : 20) 4. On March 1, a company declared quarterly dividends of $2 per share to all common stock shareholders as of March 15. The ex-dividend date is March 19 and there are 1 million shares outstanding.
During 10 years, the investors will reinvest all the cash flows into the company, so maintaining the growth of 7.45% each year. The return on equity used for the valuation is the rate of 7.45% which is the return on PacifiCorp equity on 2005. For the cost of equity, the capital would be invested in MidAmerican if the company did not take the acquisition. Therefore, I consider the rate of return on MidAmerican on 2004 (5.72%) as the cost of equity of PacifiCorp. Dividing the present value of future cash flows by the cost of the investment indicates that every dollar invested buys securities worth $1.18.
Suppose that four of them have identical coupon rates of 7.25% but mature on four different dates. One matures in 2 years, one in 5 years, one in 10 years, and the last in 20 years. Assume that they all made coupon payments yesterday. If the yield curve were flat and all four bonds had the same yield to maturity of 9%, what would be the fair price of each bond today? Suppose that during the first hour of operation of the capital markets today, the term structure shifts and the yield to maturity
Due to the income cut off level, many tax payers are not able to take advantage of the tax free retirement saving the Roth IRA offers. The Roth 401 (k) retirement account allows the tax payers to contribute no matter what their income level may be. There is no limit that applies to this account. As long as the employer offers Roth accounts, and the employee is eligible for the 401 (k) programs, they are eligible to participate. Contribution limits Individuals are able to contribute money into their Roth IRA account January of the present tax year through April 15 of the succeeding tax year.
AC550 Intermediate Accounting I Week 7 Homework Professor Date Due: Chapter 11: E 11-4, E 11-8, E 11-9, E 11-11, E 11-17, E 11-24, P 11-5 E11-4 (Depreciation Computations—Five Methods) Wenner Furnace Corp. purchased machinery for $279,000 on May 1, 2012. It is estimated that it will have a useful life of 10 years, salvage value of $15,000, production of 240,000 units, and working hours of 25,000. During 2013, Wenner Corp. uses the machinery for 2,650 hours, and the machinery produces 25,500 units. Instructions From the information given, compute the depreciation charge for 2013 under each of the following methods. (Round to the nearest dollar.)
And the steel deliveries are in a three-day window. Moreover, Kenco implements the cycle counting where 100 items making up 80% of the sales volume are counted every four weeks. What is left in inventory in 12 months is discounted to sell or scrapped. 5) Describe Kenco’s CI system and compare this process change using traditional budgeting Kenco CI system is following four steps: _ Activities for improvement must be selected _ Root causes for the activities performance as it exists must be determined _Modifications must be discovered and implemented _The impact of the change must be assessed. Traditional budgeting always plans and setting a budget for revenues and expenses, and it only focuses on short-term but not planning on long-term vision.
The fifty-two week low of $19.16 was in mid August 2011 and the fifty-two week high of $28.45 was in March 2012. Microsoft Corporation- Income statement ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA | INCOME STATEMENTS | (In millions, except per share amounts) | | | | | | | | | | | | | | | | | | Year Ended June 30, | | | | 2,011 | | 2,010 | | 2,009 | | | | | | | | | | | | Revenue | | | | | | $69,943 | | $62,484 | | $58,437 | Operating expenses: | | | | | | | | | | Cost of revenue | | | | 15,577 | | 12,395 | | 12,155 | | Research and development | | | 9,043 | | 8,714 | | 9,010 | | Sales and marketing | | | 13,940 | | 13,214 | | 12,879 | | General and administrative | |
Stock Valuation. Suppose Toyota has no maturing (perpetual) preferred stock outstanding that pays a 1.00 quarterly dividend and has a required return of 12% APR (3% per quarter) What is the stock worth Perpetual quarterly Dividend = $1.00*4 = 4.00 Annual APR = 12% 4.00/.12 = $33.33 B16. (Interest-rate risk) Philadelphia Electric has many bonds trading on the New York Stock Exchange. Suppose PhilEl’s bonds have identical coupon rates of 9.125% but that one issue matures in 1 year, one in 7 years, and the third in 15 years.