Assignment 4<\/p>\n
1. Mesquite Corporation has a bond outstanding with
\na $80 annual interest payment, a market price of $850, and a maturity date in
\nten years. Please find <\/p>\n
a. The
\ncoupon rate b. The current rate <\/p>\n
c. The approximate
\nyield to maturity <\/p>\n
2. An investor must choose between two $1,000 par
\nvalue bonds: <\/p>\n
Bond A pays $80 annual interest and has a market
\nvalue of $800. It has 12 years to maturity. Bond B pays $85 annual interest and
\nhas a market value of $880. It has 4 years to maturity.<\/p>\n
a. Compute the current yield on both bonds. <\/p>\n
b. Which bond should he select based on your answer
\nto part a? <\/p>\n
c. Compute the approximate yield to maturity on both
\nbonds. <\/p>\n
d. Has your answer changed in terms of which bond to
\nselect? <\/p>\n
3.
\nA 5-year,
\n$1,000 par value, zero-coupon rate bond is to be issued to yield 10%. a. What
\nshould be the initial price of the bond <\/p>\n
b. If
\nimmediately upon issue, interest rates dropped to 8%, what would be the value
\nof the zero-coupon rate bond? <\/p>\n
c. If
\nimmediately upon issue, interest rates increased to 12%, what would be the
\nvalue of the zero-coupon rate bond? <\/p>\n
4. Dr. Eveal Industries has the following balance
\nsheet (The firm has a market price of $22 a share): <\/p>\n
Dr.
\n Eveal Industries<\/p>\n
Assets<\/p>\n
Cash<\/p>\n
$110,000<\/p>\n
Accounts receivable<\/p>\n
$520,000<\/p>\n
Fixed assets<\/p>\n
$1,370,000<\/p>\n
Total assets<\/p>\n
$2,000,000<\/p>\n
Liabilities and Stockholders Equity<\/p>\n
Accounts payable<\/p>\n
$500,000<\/p>\n
Notes payable<\/p>\n
$100,000<\/p>\n
Total liabilities<\/p>\n
$600,000<\/p>\n
(Capital account)<\/p>\n
Common stock 100,000 shares @ $4 par<\/p>\n
$400,000<\/p>\n
(Capital account)<\/p>\n
Capital in excess of par<\/p>\n
$200,000<\/p>\n
(Capital account)<\/p>\n
Retained earnings<\/p>\n
$800,000<\/p>\n
Total equity<\/p>\n
$1,400,000<\/p>\n
Total liabilities and stockholders equity<\/p>\n
$2,000,000<\/p>\n
a. Show the effect on the capital account(s) of a
\ntwo-for-one stock split. <\/p>\n
b. Show the effect on the capital account of a 10
\npercent stock dividend. (Part b is separate from part a) <\/p>\n
c. Based on the balance in retained earnings, which
\nof the two dividend plans is more restrictive on future cash dividends? <\/p>\n
Assignment 4<\/p>\n
5.
\nDinocom
\nInc. earned $250 million last year and paid out 25% of earnings in dividends.
\na. By how much did the company\u00e2\u0080\u0099s retained earnings increase? <\/p>\n
b. With 50 million
\nshares outstanding and a stock price of $60, what was the dividend yield? <\/p>\n
6.
\nThe shares
\nof Bankston Company sell for $75. The firm has a P\/E ratio of 12. Fifty percent
\nof earnings are paid out in dividends. What is the firm\u00e2\u0080\u0099s dividend yield? <\/p>\n
7.
\nSuppose a
\nSwedish krona is selling for $0.1121 and a Maltan lira is selling for $2.7878.
\nWhat is the exchange rate (cross rate) of the Swedish krona to the Maltan lira?<\/p>\n
8.
\nAbout three
\nyears ago, the following spot and forward rates for the British pound ($\/\u00c2\u00a3)
\nwere reported: <\/p>\n
Spot<\/p>\n
$1.525<\/p>\n
30-day forward<\/p>\n
$1.522<\/p>\n
90-day forward<\/p>\n
$1.520<\/p>\n
180-day forward<\/p>\n
$1.514<\/p>\n
a. Was the British pound selling at a discount or
\npremium in the forward market? <\/p>\n
b. What was the 30-day forward premium (or
\ndiscount)? <\/p>\n
c. What was the 90-day forward premium (or
\ndiscount)? <\/p>\n
d. Suppose you executed a 90-day forward contract to
\nexchange 100,000 British pound into U.S. dollars. How many dollars would you
\nget 90 days hence?<\/p>\n","protected":false},"excerpt":{"rendered":"
Assignment 4 1. Mesquite Corporation has a bond outstanding with a $80 annual interest payment, a market price of $850, and a maturity date in ten years. Please find a. The coupon rate b. The current rate c. The approximate yield to maturity 2. An investor must choose between two $1,000 par value bonds: Bond […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8558,8557,8560,8561,8559],"tags":[8207,8206,8208,8211,8210,8209],"class_list":["post-46705","post","type-post","status-publish","format-standard","hentry","category-apa-citation-format-assignment-help-online","category-assignment-writers-australia-for-college-students","category-buy-essay-usa","category-uk-cheap-essay-writing-service","category-write-my-essay-fast-plagiarism-free-ai-writing-tool","tag-1-dissertation-writing-and-essay-services","tag-best-assignment-help-for-academic-papers","tag-cheap-essay-writing-with-online-tutoring","tag-dissertation-writing-and-write-my-essay-solutions","tag-online-assignment-help-and-paper-writing-services","tag-write-my-paper-fast-homework-assistance"],"_links":{"self":[{"href":"https:\/\/www.colapapers.com\/us\/wp-json\/wp\/v2\/posts\/46705","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.colapapers.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.colapapers.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.colapapers.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.colapapers.com\/us\/wp-json\/wp\/v2\/comments?post=46705"}],"version-history":[{"count":0,"href":"https:\/\/www.colapapers.com\/us\/wp-json\/wp\/v2\/posts\/46705\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.colapapers.com\/us\/wp-json\/wp\/v2\/media?parent=46705"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.colapapers.com\/us\/wp-json\/wp\/v2\/categories?post=46705"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.colapapers.com\/us\/wp-json\/wp\/v2\/tags?post=46705"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}