Financial Analysis- JET 2 Task 3 Krista Yunck, MBA MGMT & STRAT 11/01/2012 Student ID: 000285809 My Mentor: Rose Sklar 925-759-2061 or kyunck@wgu.edu Tucson, AZ- Arizona A1. Capital Structure Capital structure is defined as the mix of a company’s short-term debt, and long-term debt as well as their common and preferred equities. For Competition Bikes Inc. capital structure is how they finance their overall operations as well as how they finance their overall growth. Competition
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HANH DANG ID 1236466 ASSIGNMENT 1 CHAPTER 4 4-8 Present Value (PV) = $20,000 Time : 5 years = 60 months Interest Rate : 12% = 1% per month The monthly loan payment is FV = PV (1+I)^N = $-20000 (1+ 0.01) ^60 = $444.89 EFF% = (1+I/M)^M – 1 = (1 + 0.12/12)^12 – 1 = 1.1268 – 1 = 0.1268 The loan’s EFF % = 12.68% 4-10 a. FV = PV (1 + I)^N = $500 (1+ 0.06) ^ 10 = $895.42 b. FV = $500 (1+0.12)^10 = $1552.92 c. PV = $500 / (1+0.06)^10 = $279.20 d. PV = $500 / (1+ 0.12)^ 10 =
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justifiable price of common stock? The dividend discount model (DDM) states that the price of the stock at a given time is: Po= Div1/ (r-g) where; Po= value of the stock, Div1=Dividend distributed the following year, r= required rate of return, g=growth rate of dividends, the growth rate “g” is assumed to be constant. The value of the stock can also be found based on the following over time: Po = Div1/ (1+r) + Div2/ (1+r) 2 + Div3/ (1+r) 3 + (Divn +Pn)/ (1+r) n Therefore, Po, P1, P2 and Pn can be
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The NPV generated from launching LTAC facility is forecasted as $24.7 million by the discount rate of 7.84%. Internal rate of return (IRR) is found to be 9.78%, above the discount rate which indicates a positive return on LTAC project. The present value of the perpetuity is projected to be $23.3 million, discounting back all the future cash flows with 5% long-term growth rate and WACC derived from the average of for-profit health care companies’ financials. The perpetuity at year 10 takes into consideration
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investment of £9.00 million will be necessary in plant and machinery. This expenditure can be written off (capital allowances) for tax purposes on a straight-line basis over the product’s expected six year life. It is anticipated that the re-sale value of the equipment will be about £2.00 million at the
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inflation, income tax and interest rate. Firstly, Using the Present Value Function we can calculate the compound interest of the lump sum ($334.1m) in relation to the total value of the annuity payout ($500m). Based on the PV Formula: PV = FV/(1+i)n 334.1 = 500/(1+i)29 500/334.1 = (1+i)29 29√1.49 = 1+i 1.0139 – 1 = i Interest Rate = 1.4% To meet the $500m Future Value of the annuity payout, Lucky Ducky would have to gain 1.4% compound interest
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SP-2015-GRAD Professor Brain McElyea Student Sara McDaniel Old Alfred Road, who is well-known to drivers on the Maine Turnpike, has reached his seventieth birthday and is ready to retire. Mr. Road has no formal training in finance but has saved his money and invested carefully. Mr. Road owns his home—the mortgage is paid off—and does not want to move. He is a widower, and he wants to bequeath the house and any remaining assets to his daughter. He has accumulated savings of $180,000, conservatively
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Assignment 3 Solve the following problems showing your work: Q1. If you have a credit card with 14.4% APR a. What is your monthly interest rate and what is your annual effective interest rate? ia (monthly) = 14.4%/12 = 1.2% ia (annual effective interest rate) = (1 + .144/12)12 – 1= 15.39% b. If you have an outstanding balance of $1,800 on that card what would be the balance if you skipped 4 months payments (ignore credit card fees and penalties) 1800(1.012)4= $1887
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risk (systematic risk) -results from factors that affect all stocks. -Diversification investing in more than one security to reduce risk -Holding period returns the return an investor would receive for holding a security for a designated period of time. Beta the relationship between an investment's returns and the market's returns. Measurement of nondiversifiable risk. -Portfolio beta the relationship between a portfolio's returns and the market returns. It is a measure of the portfolio's nondiversifiable
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Exercício 1 • You are offered an asset costing $600 that has cash fl ows of $100 at the end of each of the next 10 years. • a. If the appropriate discount rate for the asset is 8 percent, should you purchase it? • b. What is the IRR of the asset? Exercício 2 • You just took a $10,000, five-year loan. • Payments at the end of each year are flat (equal in every year) at an interest rate of 15 percent. Calculate the appropriate loan table, showing the breakdown in each year between principal
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