PRACTICE MATHS VALUATIONS AND RATES OF RETURNS (CHAPTER-10) FIN 201 INSTRUCTOR: G. M. Wali Ullah 1. X is expected to pay a dividend of $1.50 in the coming year. The required rate of return is 16% and dividends are expected to grow at 7% per year. What is the price of the stock? 2. Arts and Crafts Inc. will pay a dividend of $5 per share in 1 year. It sells at $50 a share, and firms in the same industry provide an expected rate of return of 14%. What must be the expected growth rate of the
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Question 1.6 In short, the objective of this question is to propose a fixed-for-floating interest rate swap that will reduce of cost of borrowing for both parties involved. The available fixed- and floating interest rates are summarized in the following table: | Company A | Company X | Fixed | 10% | 12% | Floating | LIBOR + 0.25% | LIBOR + 0.75% | As can be seen from the table, Company A has an absolute borrowing advantage in the sense that Company A has access to both lower fixed
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Financial Management Chapter 5 * Future value VS present value * The present value technique uses discounting to find the present value of each cash flow at the beginning of the project. t=0 * The future value technique uses compounding to find the future value of each cash flow at the end of the project’s life * The future value equation * ( * FVIF is the FV of 1 dollar at i% per annum after n periods * Future value DEPENDS on the number of periods in which interest
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year Interest Net Present Value 1b. How much can Virginia spend today? Team 6 $2,000,000 $3,000,000 6% (NPV) = $2M + $3M/ (1+0.06) = $4,830,188.68 Virginia's current wealth is made up of her $2 million in had and the present value of her future $3 million. Without a loan If Virginia does not want to borrow from the bank, she can spend a maximum of $2 million. With a loan If Virginia makes use of a bank loan, taking into account the $2million in hand and the present value of her future 3 million
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if the company manufactured paint cans internally instead of purchasing them would reduce the production costs. As part of my analysis I have computed the Cash flows over the life of the project, Payback Period, Annual Rate of Return, Net Present Value and the Internal Rate of Return to use as the basis of my recommendation. I recommend that Clark Paints Inc. should accept the proposal to manufacture the paint cans in lieu of their current practice of purchasing the paint cans. If the company
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payment occurs one year from today? The market interest rate is 4.5 percent. PV = C / r PV = $160 / 0.045 PV = $3,555.56 3. Present Value and Multiple Cash Flows Investment X offers to pay you $6,000 per year for nine years, whereas Investment Y offers to pay you $8,500 per year for five years. Which of these cash flow streams has the higher present value if the discount rate is 9 percent? If the discount rate is 21 percent? PVA = C ({1 – [1/(1 + r)]^t} / r X @ 9%: PVA $6,000 {[1 – (1 /
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商品购销合同 甲方：安徽省驿达高速公路服务区经营管理有限公司龙门寺服务区 乙方： 根据《中华人民共和国合同法》及其他有关法律、法规的规定，甲、乙双方经友好协商，在平等、自愿、公平、诚信、守法的原则下签订本合同，以资共同遵守。 一、主体资格 乙方在本合同签订时，应当提供营业执照、税务登记证、卫生许可证等合法缔约主体资格的证明。 二、合同标的 （一）供应的商品种类、品名、品牌、规格、生产厂厂名及厂址、等级、质量标准、包装要求、计量单位、有效期及单价等，详见本合同附件一《购销商品确认单》。在合同期内，调整商品及价格时，以双方确认的《购销商品确认单》为准。 （二）乙方应当按《购销商品确认单》提交相关商品生产、代理、批发、进口、专项经营等许可或证明文件以及相关质量检验证明。有专利、注册商标标识的，还应提供国家颁发的有关证明。 三、商品价格 （一）除属于国家定价的商品外，乙方对所供货商品自行定价，乙方报给甲方的价格，应公平合理。乙方应以书面送达方式向甲方报价。 （二）经甲方书面确认之乙方《购销商品确认单
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LES CRISES BRESILIENNES AU 20EME SIECLE | GESTION FINANCIERE INTERNATIONALE | - 2012 – 2013 - | SOMMAIRE INTRODUCTION 3 1. De la crise caféière à l’exubérance industrielle 4 1.1. La faiblesse brésilienne : la dépendance caféière au début du 20ème siècle 4 1.2. Une sortie de crise par la voie de l’industrialisation 6 2. Fin du « miracle économique » et succession de crises 9 2.1. Les origines de la crise de la dette des années 80 9 2.2. Crise de la dette : crise
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Identify two of the problems that were associated with rapid urbanization.(4 points) Urbanization is the social process whereby cities grow and societies become more urban in areas, be it horizontal or vertical, as opposed to being mostly rural and agricultural. Also Urbanization refers to the increasing number of people that live in urban areas. Urbanization changed the economic, social and political setup of a country or region and had several major negative impacts. One economic problem that it
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to assess its fair market value 2. Quantitative tools: dividend discount model (DDM) 3. P/E (price-earnings ratio) 4. Free cash flow models 1. Valuation by Comparables P/E, price-to-book value, price-to-sales value, price/cash flow ratio Comparative valuations ratios are used to assess the valuation of one firm vs. others in the same industry Limitations of book value Liquidation value per share Replacement cost of its assets – liability 2. Intrinsic Value vs. Market Price * 第一种方法
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