Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Basic Finance Expert

Question 1:  Assume you have the following Personal Loans outstanding and have allocated $675 per month as your total payments to be made. Do not incorporate tax consequences (assume all rates are after tax).

Assume that all loans have 120 months remaining (amortizing over 120 months).

Assume you must make minimal payments on all debt in each month.

Assume partial months can be paid;

Type Student loan Credit Card 1 Credit Card 2
Current Bal       8,065.45
      3,485.03
    2,219.94
Annual Rate 8.50%
12.00%
18.00%
Pmt Required $100.00
$50.00
$40.00

What is the minimal time needed, given your budget allocation, to pay off all debt?

Question 2:  You are seeking to refinance your mortgage. In order to do so, you must pay a fee of $350 and a loan fee of 1%. The loan fee is based on your new loan amount; both the flat fee and 1% fee can be added to new loan balance. You will only do so if you can save $200 per month going forward. Given the following information, can you save the monthly amount by refinancing?

Original Loan 
 $ 225,000.00



Loan rate (APR) 0.08



Original term (yrs) 30










Refinancing Date Immediately after making the following payment 60


(i.e., this is the number of months original loan has been in existence)
Refinanced Loan Rate (APR) 5.875%



Term of Refinanced Loan (yrs) 25



Question 3: Data below is taken from the recent yield curve. Calculate the implied 1-year forward rate, from period 2 to period 3


Maturity (yrs)
2 3

Rates (APR)
4.0% 5.0%

Use Annualized compounding.
Hint: Begin with $100 in period zero; calculate the end values at the end of the respective periods.

Question 4: A Zero Coupon bond was issued with a 20 year maturity. It was issued at a 12% YTM. 5 Years later, you purchased this zero coupon; your purchase price has a YTM at 9%. With 5 years left to maturity on the zeron coupon bond, you sell that asset. The buyer's YTM upon your sale is 7%. (Use annual compounding only).

Given the above information, what was you annualized return on this investment?

Question 5:  You require a 12% return on your investments; consider the potential below as an average investment. What is the price of the stock (per share), given the following information:

Net Income
     2,500,000


Number of Shares (*)      6,500,000


Depreciation and Amort      1,125,000


CapEx
                -  


Dividends
 Never paid any; does not anticipate paying any in the future 
Growth Rate of Net Income 8.0%


Market Value of All Debt    35,000,000


Your required Return 12.0%


Company XYZ:







Market Rate
% Of Total Capitalization for XYZ

Debt
9.0%
55%








Preferred
11.0%
10%








Common
17.50%
35%








Beta (XYZ Common Stock) 1.2










(Stock) Market return 10%










XYZ's Current Tax rate 20%










T-Bill rate
3%









Question 6:

Calculate the Weighted Average Cost of Capital for XYZ

Question 7: Calculate the required return of XYZ common stock using Capital Asset Pricing Model.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M9132046

Have any Question?


Related Questions in Basic Finance

An investor buysnbsp200nbspshares of stock selling at

An investor buys 200 shares of stock selling at ?$95 per share using a margin of 68?%. The stock pays annual dividends of $ 2.00 per share. A margin loan can be obtained at an annual interest cost of 6.7?%. Determine wha ...

Question - city motors will sell a 15000 car for 345 a

Question - City Motors will sell a $15,000 car for $345 a month for 52 months. What is the interest rate? (What is the process doing in financial calculator?)

Matt johnson delivers newspapers and is putting away 50 at

Matt Johnson delivers newspapers and is putting away ?$50 at the end of each quarter from his paper route collections. Matt is 9 years old and will use the money when he goes to college in 9 years. What will be the value ...

Sara has decided to invest in commercial paper with a par

Sara has decided to invest in commercial paper with a par value of $1,000,000 and a 60-day maturity for $990,000. If Sara decides to hold this investment to maturity then what will her annualized yield be?

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

1 consider an investment which has the following cash

1. Consider an investment which has the following cash flows: Year Cash flow ($) 0 (31,000) 1 10,000 2 20,000 3 10,000 4 10,000 5 5,000 Compute the: (a) payback period; (b) NPV at 14 percent cost of capital; and (c) IRR. ...

Question - congratulations today is your 20th birthday but

Question - Congratulations! Today is your 20th birthday, but you are broke. You just started working full-time, earning $50,000 per year. Your goal is to have $10 million by your 65th birthday (i.e., 45 years from today) ...

Please provide formula and detailed explanationyou have

Please provide formula and detailed explanation You have accumulated some money for your retirement. You are going to withdraw $59,758 every year at the beginning of the year for the next 18 years starting from today. Ho ...

How long will it take 600 to double if it earns the

How long will it take $600 to double if it earns the following rates? Compounding occurs once a year. Round each answer to two decimal places. 8%.  year(s) 12%.  year(s) 21%.  year(s) 100%.  year(s)

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a premium? Would we ever expect a zero coupon bond to sell at a premium? Explain.

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As