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problem: Assume your firm needs to increase 10 million dollar by issuing 10 year zero coupon bonds. Your firm's cost of debt is 8%. find out the total implicit interests for the 1st year & the last year [i.e., year 10].
Basic Finance, Finance
1) The price of Ervin Corp. stock will either be $60 or $80 at the end of the year. Call options are available with one year until expiration. T-bills currently yield 3.26 %. Suppose the current price of Ervin stock is $ ...
You are running a hot Internet company. Analysts predict that its earnings will grow at 20% per year for the next five years. After that, as competition increases, earnings growth is expected to slow to 6% per year and c ...
New developments in information technology have simplified the assessment of individual borrowers' creditworthiness. What are the likely consequences for the structure of the financial system? For monetary policy?
Real Interest Rate: Estimate the real interest rate over the last year. If financial market participants overestimate inflation in a particular period, will real interest rates be relatively high or low? Explain.
What situation would you use preferred and convertible instruments as investments in? Why?
What does it mean that managers should maximize shareholder wealth "subject to ethical constraints"? What are the ethical considerations that might impact decisions that result in cash flow and price effects that are les ...
What are the two major provisions of the McFadden Act? What was the motivation behind its passage?
Regarding the rules of probability, which of the following statements is correct? A. If A and B are independent events, then P(B) = P(A)P(B). B. The sum of two mutually exclusive events is one. C. The probability of A an ...
What is the difference between financial futures and financial forward markets? What are derivative markets? What are the ways derivatives can be used?
Link through the text Web site to the site of Planet Rating, a French organization that calls itself "the global microfinance rating agency." What is the main function of Planet Rating? How might its work help the microf ...
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