You currently own a 30 year Treasury Bond at 4% interest, paid semiannually. The market interest rates for like securities rose to 5%. Would your bond sell for a premium or a discount? Why? What would...

You currently own a 30 year Treasury Bond at 4% interest, paid semiannually. The market interest rates for like securities rose to 5%. Would your bond sell for a premium or a discount? Why? What would...

in spring 2010, some car dealers offered 2 deals on a new car: (1) a cash-back allowance of $500 of (2) 0% financing for 72 months.

Suppose I have the following question: Every week the sales of a band’s album drop by the same percentage relative to the previous week’s sales. In its first week an album sells 8,000 copies...

Palencia Paints Corporation has a target capital structure of 25% debt and 75% common equity, with no preferred stock. Its before-tax cost of debt is 13% and its marginal tax rate is 40%. The current...

Microtech Corporation is expanding rapidly and currently needs to retain all of its earnings. Hence it does not pay dividends. However, investors expect Microtech to begin paying dividends, beginning...

Multiple choice: If you owe $48,000 on a loan which charges an annual interest rate of 12%, compounded monthly, and you can afford to pay $689 per month toward your loan, it takes 10 years to pay...

One business has a large amount of debt on which it pays an annual yield of 10%. A competitor has no debt, and any excess money goes into the bank and earns an annual yield of 2%...

My finance class hasn't begun time value yet but it's part of our homework. Help?

Assume tht the operationof your business resulted in sales of $370,000 last year. Year-end receivables are $100,000. You are considering factoring the receivables to raise cash to help finance your...

Suppose you have $1.5 million loan with semi-annual installments over 10 years. How much do you pay towards the principal in the second installment if the interest rate of this loan is 1.8% compounded...

You are borrowing $4,000 to purchase a HD plasma TV using a 36 month installment plan. Determine the annual percentage rate (APR) using the APR formula given that the interest charge is $782.96. Round...

Stock A’s expected return and standard deviation are E[RA] = μA = 6% and σA = 12%, while stock B’s expected return and standard deviation are E[RB] = μB = 10% and σB = 20%. (a) How would you construct...

A principal of $7000 is invested in an account paying an annual rate of 5.5%. Find the amount in the account after 3 years if the account is compounded semiannually, quarterly, and monthly

Global electronics Inc. invested $1,000,000 to build a plant in a foreign country. The labor and materials used in production are purchased locally. The plant expansion was estimated...

It has been said that expected bankruptcy costs can help explain the use of equity versus debt in corporate financial structure, even though interest but not dividends are tax deductible. Can bankruptcy...

You currently own a 30 year Treasury Bond at 4% interest, paid semiannually. The market interest rates for like securities rose to 5%. Would your bond sell for a premium or a discount? Why? What would...

The December 31, 2015, balance sheet of Schism, Inc., showed long-term debt of $1,445,000, $149,000 in the common stock account, and $2,740,000 in the additional paid-in surplus account. The December...

1. The forward Indian Rupee (Rps), relative to $, given spot rate of Rps 48.50 and a 3 month forward rate of Rps 50.00 is closest to (annualized): a. 12 % premium (approx.) b. 12.37% discount...

Photon Inc. is considering acquiring one of its competitors. Photon’s management wants to buy a firm it believes is most undervalued. The firm’s three major competitors, Ajax, Babo, and Comet, have...

Growth Rate in Year 1-5 10% Growth Rate after Year 5 4% Discount rate in Year 1-5 9% Discount rate after Year 5 8% FCF 10...

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