David Y. Kim Section 004, Foundations of Financial Markets Professor Jeffrey Wurgler Homework 1 1. Bid = 102 ¼, Ask = 102 ½ a. Buy = 4,000(102.25) = $409,000 Sell = 4,000(102.50) = $410,000 Profit = $410,000 – $409,000 = $1,000 Value of Inventory at Ask price = –6,000(102.50) = –$615,000 b. New Bid = 110.25, New Ask = 110.5 Sell = 2,000(110.5) = $221,000 Buy = 8,000(110.25) = $882,000 Sold 6,000 shares yesterday for 6,000(102.50) = $615,000 Loss = $221,000 – $882,000
Words: 647 - Pages: 3
the sinking fund factor is 0.0404. Compute the interest rate i. 3. A riverfront walkway was constructed for $1,000,000. The annual maintenance cost is $12,000 per year. It is also estimated that a repair cost of $100,000 will be needed at the time the walkway reaches its half useful life. Using an annual interest rate of 4% and a useful life of 40 years, compute the present worth of this activity. 4. Two alternatives are suggested for improvement to a power generation plant. Alternative
Words: 456 - Pages: 2
Chapter 8 Valuation of Company Shares: Earnings Based Methods The objectives of this chapter are to present the earnings based methods of share valuation, to critically appraise the available empirical evidence, and to provide examples of the problems, issues and limitations of share valuation. Chapter Outline • Overview of the relationship between earnings and value. • Compounding versus Discounting • Long Event Windows and Discounted/Compounded
Words: 4439 - Pages: 18
LER 568: FIRM PERFORMANCE & HRM School of Labor and Employment Relations Office hours: By appointment, LER 211 Andrew Weaver, PhD Email: aweaver5@illinois.edu Phone: (217) 265-5087 REQUIRED TEXTS (purchase prior to class) Brealey, Myers, & Marcus. Fundamentals of Corporate Finance (8th Edition) Note: please buy a version that comes with the online “Connect” access. We will use Connect for problem sets. HBS Press & SHRM. The Essentials of Finance and Budgeting (Business Literacy for
Words: 2850 - Pages: 12
not to tax affected * What will new debt be financed at * 9-4 practice/floatation cost/ Preferred * Problems at end of 9 Chapter 10 * Payback method-does not take time value of money in account/nor does it take take cash flows after payback period * Discount method does take time value of money in account but still does not take cash flow * IRR not as good NPV-discount rate that drives NPV to 0 * Changed weighted avg. of capital it does not change IRR * Critisim
Words: 348 - Pages: 2
6. PMT= $73000 N= 8 years i= 8.5%= 0.085 We know that annuity formula for PV PV=PMT [1-(1+i)-n/i] = 73000[1-(1+0.085)-8/0.085] = $411660.35 Ans 7. PMT= $4000, n= 20 years, i= 11.2% We know that FV= PMT [(1+i)n-1/i]= 4000[(1+0.112)20-1/0.112] = $262781.16 Ans For n= 40 years FV= 4000[(1+0.112)40-1/0.112] = $2459072.63 Ans 8. FV= 90000
Words: 585 - Pages: 3
An update for liabilities PRBA003 CORPORATE ACCOUNTING Department Name Simon Morris 00 Month 2010 Law And Business AASB 137 defines a liability as a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits. This is the same as the definition in the AASB Framework There are three parts to a liability, There must be a present obligation (legal or constructive) It must have arisen
Words: 2018 - Pages: 9
Introduc)on to financial management WEEK 1 Chapter 1 & 2 1 Expectations • A#end all classes with copies of slides. • Read the text book. • A#end all tutorials and par)cipate. • Complete the weekly quizzes and assignments. • If you are struggling • A#end consulta@on • A#end PAL. • Don’t leave it to the last week. 2 The objective of managers • Should be to maximise the wealth of the shareholders • A company also has other stakeholders that rely on it, for example:
Words: 2563 - Pages: 11
Course | Financial Management | Test | Week 5 Midterm Exam Part 2 | Started | 5/9/16 9:47 PM | Submitted | 5/9/16 11:36 PM | Due Date | 5/10/16 6:00 PM | Status | Completed | Attempt Score | 44 out of 50 points | Time Elapsed | 1 hour, 49 minutes out of 3 hours | Instructions | This exam consist of 25 multiple choice questions and covers the material in Chapters 4 through 7. | Results Displayed | Submitted Answers, Correct Answers, Feedback | * Question 1 2 out of 2 points
Words: 1830 - Pages: 8
Corporate Finance 1. Time value of money This concept discuss about the future value and the present value of money. For example a dollar today has more value than the dollar you will be earning in the future. Time value of money is a very important concept because it will help make decision on how much to save today to have a certain amount of saving for retirement in future. Interest rate and a time line also plays an important role in analyzing the time value of money. For Individuals the
Words: 1358 - Pages: 6
