On January 1, 2016, you made an initial deposit of $400 into a savings account to begin saving to pay for 3 years of horseback riding lessons that you plan to begin on January 1, 2021 as well as the purchase of a horse 8 years from now. You will continue depositing $400 on the first day of each month for the next 5 years until you begin the lessons. Lessons will be paid for annually at the end of each year and are expected to increase 3% per year. Your first year of lessons will cost $10,000. At the end of 3 years of lessons, you plan to spend $5,000 to purchase a horse. Your parents have committed to making a 1-time deposit into your savings account….
Integrative—Risk and Valuation Given the following information for the stock of Foster Company, calculate the risk premium on its common stock. Current price per share of common $50.00 Expected dividend per share next year $ 3.00 Constant annual dividend growth rate 9% Risk-free rate of return 7%
There are two companies, AA and BB, each with current annual earnings of $2 per share. AA trades for $20 per share and BB trades for $30 per share.(b) Assume AA and BB are both priced e?ciently and according to the constant dividend growth model. If both stocks pay half their earnings as an annual dividend, and both stock’s earnings grow at an average rate 3% per year forever, what is the expected return for AA and BB over the next year? (c) Assume, as in (b), that BB is priced correctly according to the constant dividend growth model, that BB pays half their earnings as an annual dividend, and that its earnings grow at an average rate of 3% per year forever. But now assume that AA….
ginning a year from now. Bernando vilyeceive will be fifteen of these annual payments. WI-iat is the present annual interest rate is applied as the discount rate? 7. Liz Rogers just closed a S10,000/- business loan that is to be loan is 13 %. As part year payments. The inteN .st vp.tP 9 h 1,1 te ann,iial interest deducti planning, Liz wishes to determine the of each [oan payment it is a business loan the interest portion a year from his pension t’und. There value of these paymtmts if o percent repaid in three equal animal end of of her firm’s detailed financial on attributable to the loan. (Because is tax deductible to the business). a. Determine` the firm’s annual loan payment. b. Prepare an amortization schedule for….
Choose a company (which is listed on the stock exchange and in one line of business) for which you can obtain substantial information. Your report (8-9 Pages) must include the following: 1. Executive summary 2. Opinion about the company’s financial strategy 3. A complete financial analysis (vertical, horizontal, financial ratios) of the company, Risk Factors, Investment conclusion. 4. Competitive analysis (2 competitor’s) 5.Forecasting (must include EPS forecast). 6. Conclusions.
. State and explain M&M’s Proposition I and II. How can shareholders be indifferent to increased leverage when it increases expected return? 2. Which one, dividend increase and stock repurchase, signals greater future profits? Why? 3. China launched its first stock options on the Shanghai Stock Exchange in Feb 2015. The options are based on the exchange-trade fund (ETF) that tracks the SSE 50 index, composed of the 50 most heavily weighted stocks on the bourse. Give an example of stock option traded in the HK Stock Market. What is its underlying stock, current price and strike price?
Suppose you have been hired as a financial consultant to Defense Electronics, Inc. (DEI), a large publicly traded firm that is the market share leader in radar detection systems (RDSs). The company is looking at setting up a manufacturing plant overseas to produce a new line of RDSs. This will be a five-year project. To facilitate this project, DEI purchased some land where they will build their new manufacturing plant, which cost $4.4 million on an after-tax basis. In five years, the after-tax value of the land will be $4.8 million. The plant and equipment will cost $37 million to build.DEI’s tax rate is 32 percent. The project requires $1,300,000 in initial net working capital investment to get operational. The manufacturing plant has an eight-year tax life, and….
Search online for information about the amusementindustry. Identify three key success factors in theindustry.2. Visit Premier Rides’ Web site. Describe the company’sstrengths and weaknesses. What opportunities andthreats does the company face?3. Which of the three strategies described in thischapter is Premier Rides pursuing? What advice canyou offer Jim Seay about the company’s strategy?
What products from China are currently subject to U.S. tariffs? Describe/quantify the existing and proposed tariffs. How have the recent tariffs affected economic growth in China? What industries have been hurt the most (least)? Have the tariffs had an effect on foreign direct investment into China? How have the tariffs affected the supply chain of U.S. companies?
Answer the questions in a two page essay. Also make an Powerpoint presentation about this subject.
What is the underlying premise of Gerry Sherman’s question “…Do you want 50 cents now or 40 cents in two years?” Do you agree with the arguments that he develops around this premise? What, if any, additional considerations do you think need to be included in the analysis of the relative benefits of Chapter 11 reorganization versus asset sales?