Finance Archive: Questions from February 12, 2020

  • You loaned $100 to a friend for one year at a nominal rate of interest of 5 percent. Inflation during that year was 8 percent. How much did the purchasing power of your money change (an increase is po
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  • Problem 5. The Black-Scholes formula is derived using C=e- C(T)) = e-TEP [(S(T) - K)+), that is, as the discounted expected c

    Problem 5. The Black-Scholes formula is derived using C=e- C(T)) = e-TEP [(S(T) – K)+), that is, as the discounted expected call option payoff in the risk-neutral world. a) Derive the formula for the

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  • Determine the accumulated value of monthly deposits of $94 each after 14 years if the deposits earn 7.2%/year compounded monthly. Assume the deposits are made at the end of each month.
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  • What quarterly deposits should be made into a savings account paying interest at 7.7%/year compounded quarterly in order to accumulate $160000 at the end of 20 years?
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  • Determine the accumulated value of quarterly deposits of $59 each after 15 years if the deposits earned 9.0% per annum compounded quarterly for the first 4 years and 9.1% per year compounded quarterly
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  • Diane has an insurance policy with a cash value at age 65 that will provide upon retirement monthly payments of $500 for 24 years, first payment one month after reaching 65. If the insurance company p
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  • Determine the present value of quarterly deposits of $620 that are expected to be made for 14 years if the deposits earn 6.7% per annum compounded quarterly for the first 7 years and 8.3% per year com
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  • Some companies list their shares in more than one stock exchange. For example, “ESSA Pharma Inc.” (EPIX) trades on both the Toronto Stock Exchange (TSE) and on Nasdaq. Assume that there are no dif
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  • Please answer all parts A, B, and C. Please show all work! If you use Excel to solve this problem please make clear the calculations you made.a. Calculate the monthly interest and principal cash flow for a fixed rate self amortizing mortgage with an initial balance of $350,000, a contract rate of 3.75%, and a maturity of two years. b. If th
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  • As a company who rely on its exports for revenues, what strategy should you adopt if the country you export goods to is experiencing currency depreciation?
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  • . NEED ANSWER ASAP / ANSWER NEVER USED BEFORE a.) NPV A project has an initial cost of $60,000, expected net cash inflows of $11,000 per year for 9 years, and a cost of capital of 10%. What is the pro
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  • Seven years ago, ABC issued a 10% coupon bond that paid semi-annual coupons. The YTM on the bond when issued was 7.5%. That YTM stayed constant until yesterday it dropped to 6.5% suddenly. Which of th
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  • QUESTION Mr JABARI is the Director-General of WBG Ltd an investment private company with 100 shareholders. Last week Mr JabarQUESTION Mr JABARI is the Director-General of WBG Ltd an investment private company with 100 shareholders. Last week Mr Jabari met with his old friend Mr Jongo who is the CEO of ABC company listed at
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  • . NEED ANSWER ASAP / ANSWER NEVER USED BEFORE a.) Project Cash Flow The financial staff of Cairn Communications has identified the following information for the first year of the roll-out of its new p
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  • . NEED ANSWER ASAP / ANSWER NEVER USED BEFORE a.)Capital Budgeting Methods Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of $3,000 per year for 5 years. Project L costs $25,000 and is expected to produce cash flows
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  • . . NEED ANSWER ASAP / ANSWER NEVER USED BEFORE a.) Project Cash Flow The financial staff of Cairn Communications has identified the following information for the first year of the roll-out of its new
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  • Explain why multinational capital budgeting is more complex than in a purely domestic capital budgeting project
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  • If you conduct an internet search using the terms “Facebook” and “international,” you will find plenty of articles about Facebook’s strategy for international growth. Explain why Facebook se
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  • NEED ANSWER ASAP / ANSWER NEVER USED BEFORE some considerations should be taken into account when doing capital budgeting: incremental earnings, interest expenses, taxes, opportunity costs, externalit
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  • Evaluate whether you think the claimed conclusion of the following scenario is true or false: A friend of yours has discovered a striking predictability pattern in stock returns: stocks that recently
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  • Am I supposed to find the risk premium? And what numbers do I plugin? I’m very confused about how to answer this. Thank you in advance.2. A financial analyst measures the monthly returns of two stocks (A and B) over a twenty year period. Over that time period, stock A had an average return of 11% (per year) with a standard deviation
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  • 1. FESTO manufactures solenoids widely used in automation equipment. In order to set up the manufacturing plant, the company

    1. FESTO manufactures solenoids widely used in automation equipment. In order to set up the manufacturing plant, the company estimated the monthly fixed costs due to capital recovery and machinery to

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  • You are looking at a long position in three wheat contracts of 5,000 bushels. Each contract is worth $2.00 per bushel today. Each contract requires an initial margin of $150 and a maintenance margin o
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  • 1044.89=100/1+i + 100/(1+i)2 + 1000/(1+i)2 Can someone provide me the solution for this the answer is 7.5 % I don’t know how they got this
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  • The price of a zero-coupon bond with $100 face value maturing in three years is $92.83. The price of a zero-coupon bond with $100 face value maturing in five years is $86.63. What is the continuously-
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  • In February of 2018 you entered into a forward rate agreement. According to the forward rate agreement, you will borrow $2 million at a continuously-compounded interest rate of 3.45%, with the loan to
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  • Explain the primary drivers behind cross-border acquisitions
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  • From a financial point of view, explain why Facebook seeks to grow internationally, its strategy for such growth, and the risks Facebook faces with this strategy.
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  • Explain diversification and benefit of a diversified portfolio.
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  • Shareholders require a 15% return on their shares and a company has just paid a dividend of €0.80 per share. Over the past four years, the company has paid dividends of €0.68, €0.73, €0.74, an
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  • Your project is WeWork, an American commercial real estate company that recently postponed its IPO, fired its CEO, and sold to SoftBank at a large loss. WeWork has recently laid off 20% of its workfor
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  • Q. Sarah and Joshua each use their credit cards to buy holiday packages to Adelaide. The cost of the package is $1700 for each person. a) The charge on Sarah’s credit card is 0.9% compound interest
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  • Hello, i don’t know how to do these questions, so can you cpmpute these question in detailed steps ? Thank you for your help!10. A financial planner wants to design a portfolio of investments for a client. The client has $300,000 to invest and the planner has identified four investment options for the money. The following r
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  • Kenneth Clark is 30 years and wants to retire when he is 65. So far he has saved (1) $5,750 in an IRA account in which his money is earning 8.3 percent annually and (2) $5,130 in a money market accoun
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  • - + Fit to page D Page vie Determining the Cost of Capital Hubbardton Iron Works The Hubbardton Iron Works Corporation (HIWC)D Page vi - + Fit to page upon jong Tuw, Fanny i aneu wat most projects were veng approveu und gut icem approach. There were- + ~ Fit to page 1 TABLE 1 HIWC Balance Sheet (000s) Cash Accounts Receivable Inventory Total Current Assets 5000 10000 200- + R Fit to page D Page TABLE 2 HIWC Sales, Earnings and Dividend History (*000s) Earnings Per Share Dividends Per Share Yea– + Fit to page D Page vie Determining the Cost of Capital Hubbardton Iron Works The Hubbardton Iron Works Corporation (HIWC), a Boston based company was established in 2000. Harold Tugman, IV founded
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  • Why might a country want to intervene (manipulate) in the currency markets for its home currency? How could a government intervene? Are there any countries that are currently manipulating their curren
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  • What are (a) pass through expenses, (b) recoverable expenses, and (c) common area expenses? Give an example of each.
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  • n February of 2018 you entered into a forward rate agreement. According to the forward rate agreement, you will borrow $2 million at a continuously-compounded interest rate of 3.45%, with the loan to
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  • Consider two projects, A and B. Project As first cash flow is $10,200 and is received three years from today. Future cash flConsider two projects, A and B. Project A’s first cash flow is $10,200 and is received three years from today. Future cash flows for Project A grow by 3 percent in perpetuity. Project B’s first cash f
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  • What important factors should guide you while selecting the investment choices given the fact that the funds are available only for a short period.As a CFO investing surplus cash is very important to
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  • XYZ stock price and dividend history are as follows: Year Beginning-of-Year Price Dividend Paid at Year-End 2015 $ 125 $ 2 2016 141 2 2017 120 2 2018 125 2 An in
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  • disscuss one of the financial analyses thay are available to be perfomed by the financial managrr in order to determine risk of investment. what is it, how is it used, what does it determine ?
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  • 1) Describe the objective and risk profile of a “classic stock-bond” or balanced fund portfolio. 2)Appraise the Treasuries bond and note market and the main risks attached to them 3)Indicate the c
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  • With an interest-only loan the principal is: Multiple Choice Ο forgiven over the loan period; thus it does not have to be repWith an interest-only loan the principal is: Multiple Choice Ο forgiven over the loan period; thus it does not have to be repaid. Ο repaid in decreasing increments and included in each loan payment.
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  • Simon recently received a credit card with a 12% nominal interest rate. With the card, he purchased an Apple iPhone 7 for $373.92. The minimum payment on the card is only $10 per month. If Simon mak
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  • show work pleasePar You observe following information of bonds A, B, and C. Assume semi-annual coupon payment and semi-annual compounding. Bond Maturity Annual Price Coupon Rate A 6 month $1000 0% $950 B 12 month $10
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  • At the beginning of the year, you invested $7,500 in a no-load mutual fund with a NAV of $30.00. At the end of the year, the fund distributed $1.05 per share in short-term earnings and $3.00 per share
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  • Alex and Betty have agreed to form a cash-basis general partnership As of January 1, 20X4, Alex contributed $175,000 cash and an apartment complex valued at $2,578,000. Alex purchased the complex on AEXHIBIT 8.9 MACRS Straight-Line Depreciation for Real Property Assuming Mid- Month Convention For Property Placed in Service after December 31, 1986: 27.5-Year Residential Real Property Recovery The A
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  • - 10.0 2. Consider the two assets A and B for which returns (%) under different conditions of economy are given as below. Fin

    – 10.0 2. Consider the two assets A and B for which returns (%) under different conditions of economy are given as below. Find the expected return and risk (as measured by standard deviation of return

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  • Time Value of Money: Buy versus Rent Based on the case study. Sean Cleary and Stephen Foerster, Ivey Publications, August 11, 2014 Question (4) Principal Outstanding
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  • principles of finance
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  • ...l du LTE 6:11 PM 42% E Notes Û Done What will happen to bond prices if terrorism ended and the worlds nations unilaterall

    …l du LTE 6:11 PM 42% E Notes Û Done What will happen to bond prices if terrorism ended and the world’s nations unilaterally disarmed and adopted free trade policies? Why? Ag © © © X ніт Не

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  • P14-7 (similar to) Alternative dividend policies Over the last 10 years, a firm has had the earnings per share shown in the fP14-7 (similar to) Alternative dividend policies Over the last 10 years, a firm has had the earnings per share shown in the following table: a. If the firm’s dividend policy were based on a constant p
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  • A company has been in business for over 50 years, newly developed products pushed the firm’s year-over-year growth rate to 35% during the last three years. The firm is proud of its history of paying
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  • Based off the Tables. What information can be taken away regarding Financial Distress, if any.Exhibit 1 Grand Metropolitan, Guinness and Diageo Financial Statements, (£ Millions). FY 98 FY 99 FY 00 Grand Met Guinness FY 97 PF CY 97 PF CY 97 PF 8,045 4,539 12,985 6,978 3,584 10,982 153 11,870
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  • P14-7 (similar to) Alternative dividend policies Over the last 10 years, a firm has had the earnings per share shown in the fP14-7 (similar to) Alternative dividend policies Over the last 10 years, a firm has had the earnings per share shown in the following table: a. If the firm’s dividend policy were based on a constant p
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  • From Chapter 1 1. List financial institutions 2. List the commercial banks in KSA 3. What is meant by:- (a) Bank; (b) Interes

    From Chapter 1 1. List financial institutions 2. List the commercial banks in KSA 3. What is meant by:- (a) Bank; (b) Interest; (c) Interest rate; (d) Bonds; (e) Se (1) Financial market; (i) Foreign e

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  • Campbell Auto Repair, Inc. is evaluating a project to purchase equipment that will not only expand the company’s capacity but also improve the quality of its repair services. The board of directors
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  • What are the primary ways to finance a new business? How would you expect to finance your business in the first few years? What are 2-3 principles you will keep in mind as you go about securing the ne
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  •  Over the last 10​ years, a firm has had the earnings per share shown in the following​ table: a.  If the​ firm’s dividend policy were based on a constant payout ratio of​ 40% for all ye
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  • 10. Consider two companies, A and B, which are equivalent except for their capital structure. Both have $10000 of assets and10. Consider two companies, A and B, which are equivalent except for their capital structure. Both have $10000 of assets and earn a rate of return of 14 percent on those assets. Company A has $3000 of
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  • Please explain clearly in excel sheet. thank you so much!!The Procter & Gamble Company (PG): NYSE Date Open High Low Close Adj Close Volume 1/27/20 124.75 126.39 124.75 125.69 125.69 1/28/20 125.93 126.98 125.72 126.03 126.03 1/29/20! 125.91 126.07 125.03 12
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  • 11. Consider a firm that would have a cost of equity of 12 percent if it were an all-equity firm. The firm has $4 million of11. Consider a firm that would have a cost of equity of 12 percent if it were an all-equity firm. The firm has $4 million of assets at market value. Suppose that it has $2 million of debt outstanding
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  • Explain why “a building up of official reserves measures a BOP surplus, while a drawing down of official reserves measures a nation’s BOP deficit.”
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  • Use the Excel exhibit supplement provided to extend the Exhibit 7 forecast for eight years. What do you believe the implied value of Whole Foods’ shares to be, based on this base-case forecast? ForReview View Help Home Tell me what you want to do . Insert Page Layout Formulas Data X Cut Times New Roma – 12-AA C) Copy Format Painter B IU. . . A. Clipboard Font Wrap Test Merge & Center . General
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  • There are only two risky assets (stocks) A and B in the market. Asset A: Mean = 20% Standard Deviation = 10% Asset B: Mean = 10% Standard Deviation = 5% Returns on Assets have zero correlation. A.Assu
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  • Risky Assets are A and B. Mean return for A = 20%, Standard Deviation A = 10% Mean Return for B = 10%, Standard Deviation for B = 5% B.Now assume that there is a risk free asset. The risk-free rate (f
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  • You are thinking about buying Supper Corps common stock. You will hold it for 2 years and then sell it. You expect to get a dividend of $1.50 one year from today and a dividend of $1.75 two years from
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  • Compute the 2019 standard deduction for the following taxpayers. a. Ellie is 15 and claimed as a dependent by her parents. She reports $800 in dividends income and $1,400 in wages from a part-time job
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  • Assume that the assumptions of the CAPM hold. The expected return and the standard deviation of the market portfolio are 7% and 14%, respectively. There are two individual stocks A and B: Mean Return
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  • sold @ discount Problem 2 On December 31, 2017, Yale Corp. purchased 10-year, 6% Princeton Corp. bonds with a face value of $sold @ discount Problem 2 On December 31, 2017, Yale Corp. purchased 10-year, 6% Princeton Corp. bonds with a face value of $400,000; the bonds were purchased at a price to yield an effective rate of
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  • There are many risky traded stocks, and a single risk-free asset. In January, the risk-free rate is 4% (for borrowing, and lending). In February, the risk-free rate dropped to 2% (for borrowing, and l
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  • HNL is looking for new wholesale distributors of living room accent chairs, similar to the one pictured on the right. This ch

    HNL is looking for new wholesale distributors of living room accent chairs, similar to the one pictured on the right. This chair is a popular item and they can sell it for around $250 each. Below is t

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  • Alice Werd is a new project analyst; he is working on capital budgeting analysis of two mutually exclusive projects. The followings are the cash flow forecasts for both the projects years Project A E
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  • Cash versus stock dividend Milwaukee Tool has the following​stockholders’ equity account. The​ firm’s common stock currently sells for $3.57 per share. Preferred stock​$ 94,000 Commo
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  • - Higher courts are reluctant to review a lower courts factual findings. Should thi be so? Would appeals be fairer if appell

    – Higher courts are reluctant to review a lower court’s factual findings. Should thi be so? Would appeals be fairer if appellate courts reviewed everything?

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  • Alice Werd is a new project analyst; he is working on capital budgeting analysis of two mutually exclusive projects. The foll

    Alice Werd is a new project analyst; he is working on capital budgeting analysis of two mutually exclusive projects. The followings are the cash flow forecasts for both the projects years Project A Ex

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  • I need to create a common size Income Statement (vertical analysis) using the following information which must include net sales, gross profit and net income. Yum Brands, Inc. Net Sales: Revenue for t
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  • The following financial data on the Bond Recording Company are​available Earnings available for common stockholders $600,000 Number of shares of common stock outstanding: $300,000 Earnings per shar
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  • Victoria owns land worth $500 in which she has a basis of $125. The land is subject to a mortgage of $100 which Victoria took out several years ago in order to buy the land. She transfers the land to
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  • Chartworth Associates financial statements indicated that the company had EBITDA of $3,145,903. It had depreciation of $633,Chartworth Associates’ financial statements indicated that the company had EBITDA of $3,145,903. It had depreciation of $633,000, and its interest rate on debt of $1.25 million was 7.5 percent. Calcul
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  • Calculate assessed value, given a property tax of $6,100 and 26 mills tax rate. (Round your answer to the nearest cent.) Asse

    Calculate assessed value, given a property tax of $6,100 and 26 mills tax rate. (Round your answer to the nearest cent.) Assessed value

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  • Required Information [The following information applies to the questions displayed below.] Part 1 of 2 This year, Randy paidb. Randy had no Investment Income this year, and his AGI IS $75,000. Interest deductibleRequired Information [The following information applies to the questions displayed below.] Part 1 of 2 This year, Randy paid $28,750 of Interest on his residence. (Randy borrowed $540,000 to buy his r
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  • How can i calculate the cost of equity using Security Market Line and Dividend Discount Model (DDM), the cost of debt, the market value weights, and the WACC to use your answer from Security Market LiPhillips Pharmaceuticals Limited (PPL) shares are publicly traded on the Toronto Stock Exchange. The common shares currently trade at a market price of $30.00 per share. PPL recently paid a dividend o
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  • so i need help on q number (5) : 5- Using the yield curves you have found, estimate the value of an annuity that pays $1000 every 5 years over the next 25 years (i.e., five total payments) paid by eit
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  • Need help on these 4 multiple choice questions please!2 Marks and has only one correct answer. 1. Which of the following is NOT an advantage of investing in an open-end mutual fund A. Professional management B. Daily liquidity C. You can buy units of the
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  • Matt recently deposited $30,750 In a savings account paying a guaranteed Interest rate of 5 percent for the next 10 years. ReMatt recently deposited $30,750 In a savings account paying a guaranteed Interest rate of 5 percent for the next 10 years. Required: a. If Matt expects his marginal tax rate to be 22.00 percent for th
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  • Need help on these 4 multiple choice questions please!es. With this type of 5. A company provides a Defined Contribution pension plan for its employees. With this pension plan the receives all the benefits and the bears all the funding risk A. Employee;
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  • Need help on these 4 multiple choice questions please!9. Which of the following is an important investmen ***Partners Healthcare” portfolio that we discussed in class is an important investment objective for an endowment fund such as the ents are long- B
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  • Need help on these 4 multiple choice questions please!ach to asset allocation? 13. Which of the following is NOT a characteristic of the new approach to asset allo A. Considers risk factors rather than asset classes B. Considers macroeconomic factors and
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  • 17. Which of the following statements is true about Smart Beta strategies A. They are an important component of modern port

    17. Which of the following statements is true about “Smart Beta” strategies A. They are an important component of modern portfolio theory (MPT) B. Investors who use smart beta strategics do who use sm

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  • Need help on these 4 multiple choice questions please!21. You purchased 100 shares of IBM common stock on margin at $153 per share. Assume the margin is 50%, and the maintenance margin is 30%. Below what stock price level would you a margin call? A $102.
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  • Need help on these 4 multiple choice questions please!25. Which of the following statements about Defined Benefit pension pl IL The employer is responsible for the investment choices. Employers who sponsor a defined b e loway be required to provide cash
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  • Need help on these 4 multiple choice questions please!28. Which of the following statements about the S&P/TSX Index is TRUE? A Financials and information technology have a large weight in the S&P/TSX Index. B. Materials have a lower weight in the S&P/TSX
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  • Need help on these 4 multiple choice questions please!Use the following information to answer Questions 32-35 below. You sold short 1.000 shares of Loser Ca p rice of 565 per share. Many man your view of the company, Shares of Loser Co are the largest sh
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  • Need help on question 1 please!Part B: SHORT ANSWER QUE QUESTION I (8 marks) You are an investment analyst working in the finance department of a manufacturing company with headquarters in Kansas City, Missouri. The company’s opera
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  • Need help on all parts of question 2 please!QUESTION 2 (Total of 8 marks) (a) (2 marks) What is the difference between strategic and tactical asset allocation? (0) (2 marks) What would cause a change in the strategic asset allocation (c) (2 mar
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  • You plan to retire from American Widgets Incorporated at age​65, and you want to have enough money in your savings account to withdraw​ $40,000 every year for 20 years after that. If your account
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  • You set up a college fund in which you pay $3500 each year at the beginning of the year. How much money (in $) will you have accumulated in the fund after 30 years, if your fund earns 8% compounded an
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  • Need help on question 3 parts a and b please!QUESTION 3 (Total of 6 marks) (a) (3 marks) The P/E multiple of the S&P500 index would be CPE multiple of the S&P500 index would be expected to increase during a prolonged period of high inflation. Is
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