Suppose that a stock is priced at $90. Given that a potential buyer has a required rate of return on equity investments of 8%, the expected dividend for next year when the constant rate of growth of dividends is 5% is $. (Round your response to the nearest two decimal places.) If the dividend of a stock decreases, then according to the Gordon Growth Model, holding everything else constant, the price of the stock will

Q: A forward rate agreement (FRA) is

A: Meaning of FRA i.e., Foreign Rate Agreement Forward rate agreement is a contract to determine the ra...

Q: GRAPH SETTINGS Reset Country-X Initial Value 1,000.00 Value (thousands of dollars) ($50 – $10,000) [...

A: Country X produces - $2000 per yr Country y Produces - $2200 per yr Growth – 7.2% Future Value    = ...

Q: You are an investor who is interested in purchasing AC shares which is currently trading at a price ...

A: Growth rate = 3% Required return = 8% Expected dividend = P25

Q: You want to be able to travel and your yearlong trip. During your trip your travel fund will earn 6....

A: A fund is a collection of money set aside for a specific purpose. A fund can be created for a variet...

Q: 9.  A company’s balance sheet shows the following relationships: Current ratio: 3.0 times Acid-tes...

A: Given information :  Total assets = £27 million Current ratio = 3 times Acid test ratio = 2.5 times ...

Q: National Co. has outstanding bonds with an annual 8 percent coupon. The bonds have a par value of P1...

A: Par value = P1000 Coupon rate = 8% Annual coupon amount = 1000*0.08= P80 Years to maturity = 11 Year...

Q: Beryl's Iced Tea currently rents a bottling machine for $53,000 per​ year, including all maintenance...

A: Present value of cost of all machine alternatives is calculated by discounting all cash flows to pre...

Q: Dividend Growth and Stock Valuation The Brigapenski Co. has just paid a cash dividend of $2 per shar...

A: We need to use constant growth model to calculate the value of stock. The equation is  P0 =D1/(rs-g)...

Q: The nominal annual interest rate on 6-month USD Treasury Bill is 4.50%. The spot rate of the Euro is...

A: The interest rate parity: The interest rate parity theory states that the returns earned by investin...

Q: Bulldogs Inc. 4-year long-term bonds currently yield 11%.  The real risk-free rate is 3%.  The matur...

A: The yield on the bond is sum of risk free rate and inflation and maturity risk premium and default a...

Q: The Black-Scholes model is used by Bulldogs Inc. to value call options on the stock of National Inc....

A: Call or put options are type of future contracts which are entered in today's date but which will be...

Q: uate the impact of agency costs on a firm’s selection of bond and eq

A: Step 1  The agency theory in corporate finance aims to describe and evaluate the behavior of numerou...

Q: l Inc. has been hit hard due to pandemic. The company’s analysts predict that earnings and dividends...

A: Stock price is a proportionate and relative measure of a entity's worth which displays a proportiona...

Q: I a) d. Discuss the major shortcomings of the Basle l accord.

A: When the companies look for a financial stability and minimum risk of credit , the guidelines of Bas...

Q: nominal annual interest rate on 6-month USD Treasury Bill is 4.50%. The spot rate of the Euro is $3....

A: If the interest parity hold than spot rate and forward must be in equilibrium with interest rates of...

Q: Ms. Alina made a deposit of ₱400,000. The amount was left to accumulate at 10% compounded quarterly ...

A: A depositor is paid an amount of fee on the deposit made, which is called interest. Interest is paid...

Q: Avon Co. has paid out P6.0 million in dividend to its shareholders. The company earned P20.0 million...

A: Dividend = P 6,000,000 Earning = P 20,000,000

Q: The asset manager is generally NOT responsible for: Finding properties for the investor/principal Ar...

A: Solution;- Each corporation has seperate departments and each department is headed by respective man...

Q: Compute the Indirect and Direct Quotations of the following Exchange Rates.   Swedish Krona = ?

A: Here,

Q: Consider 10.0 percent Swiss franc/U.S. dollar dual-currency bonds that pay $666.67 at maturity per S...

A: Implicit exchange rate = Swiss franc/U.S. dollar dual-currency bonds 

Q: Amortgage of $176,000 is to be repaid by making payments of $1010 at the end of each month. If inter...

A: Loans are paid by equated monthly payments that carry the payment of interest and payment of princip...

Q: You are an investor who is interested in purchasing AC shares which is currently trading at a price ...

A: Intrinsic value of shares means actual value of shares that is being held by the company or the fair...

Q: The analyst estimates that after three years the National Inc’s free cash flow will grow at a consta...

A: The value of company can be calculated as per the free cash flow valuation model

Q: equipment R20000, accumulated depreciation R16000. Depreciation is calculated at 20% p.a. on a dimin...

A: Depreciation: It is the wear and tear of the value of the equipment over the period of the time due ...

Q: Which of the following comes closest to the net present value (NPV) of a project whose initial inves...

A: Initial investment = $5 Cash flow at the end of year 2 (CF2) = $3 Cash flow at the end of year 4 (CF...

Q: Everything else equal, the annual compounding will always give the highest future value whether lump...

A: Effective interest rate is the interest rate after considering the effect of compounding and more is...

Q: Red Company has a profit margin of 15 percent on sales of $20,000,000. If the firm has a debt of $7,...

A: Solution:- Return on Total Assets ratio measures that how much net income does the company earn on i...

Q: 11. A debt of P29,000 bears simple interest at 7½% per annum. If it is repaid after 5 years, how muc...

A: Since you have asked multiple question, we will solve the first question for you. If you want any sp...

Q: What is the difference between a covenant not to compete in a contract versus a covenant not to comp...

A: Covenant A covenant is a formal legal agreement between two parties for doing or not doing some spec...

Q: a parent on the day of the child is born wishes to detrmine what lump sum would have to be paid into...

A: An annuity is a contract between you and an insurance company in which you make a lump-sum payment o...

Q: Determine the outstanding balance of an electronic gadget which was bought with a down payment of P2...

A: Down payment (DP) = P20,000 Monthly payment (P) = P2799 Interest rate = 2 1/2% = 2.50% Monthly inter...

Q: g. National Co. estimates that its capital budget for the upcoming year will be P800,000,000, and it...

A: The capital structure of the company consist of debt and equity. Some part is financed by debt and s...

Q: Inc. 4-year long-term bonds currently yield 11%. The real risk-free rate is 3%. The maturity risk pr...

A: The yield on the long term bonds have risk interest rate, inflation premium , liquidity premium and ...

Q: the 4 factors that affect the level of interest rate, How each one of them works

A: The interest rate is the amount charged by a lender to a borrower on top of the principle for the us...

Q: PROBLEM: If Php 6,000 must accumulate for 12 years at 12 % compounded quarterly, then find the compo...

A: Investment amount (PV) = 6000 Period = 12 Years Quarterly period (n) = 12*4 = 48 Interest rate = 12%...

Q: B. REDRDER POinT? GIven: VEAD TimE = 1 WEEK AUERAGE USAGE = 7,000 units per uk. THERE ARE 50 WORKING...

A: Solution:- Re-order point is the point which tells that when should a firm places next order to its ...

Q: A lease agreement valued at $25,000.00 requires payment of $900.00 at the beginning of every quarter...

A: Given Information : Value of Lease = $25,000 Payment made each quarter = $900 Number of years = 12

Q: In the spot market, P1 = 100 USD, 1 USD = 0.95 Yen, and 1 Yen = 5.50 British Pound. What is the exch...

A: The cross rate functions can be used to calculate the exchange rate of Peso and Pound

Q: effective annualized rate

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any ...

Q: 2-year zero coupon bond has a face value of £100 and a price of £92. A three year zero coupon bond h...

A: Zero coupon bond do not have any coupon and they are traded at discount and cash out on face value o...

Q: Suppose you make quarterly deposits into an account that earns 6% annual interest compounded monthly...

A: Interest rate (r) = 6% Number of compounding per year (m) = 12

Q: Which is not true about the Banko Sentral ng Pilipinas and the Philippine banking industry?   Banko ...

A: Bangko Sentral ng Pilipinas of the Philippines is responsible for the monetary policies, monetary op...

Q: Little Lemon Co. is identifying the value of its equity using the enterprise valueapproach as they h...

A: Calculation of nominal risk-free rate : Nominal risk-free rate = 1+Real risk free rate×1+Inflation p...

Q: The following data are available for a bond Face value 7 1,000 Coupon Rate 16% Years to Maturity Red...

A: Face Value = 1,000 Coupon rate = 16%  Years to maturity =  6 Redemption value = 1,000 Yield to matur...

Q: ¿How much is the Customer Lifetime Value? (Select best answer) Assumptions: Retention Rate= 75%, Av...

A: We need to write down what we have given in this Question Retentions Rate=75% Average Annual Costume...

Q: You want to be able to travel and withdraw $3750 at the end of every month during your yearlong trip...

A: Monthly withdrawal (M) = $3750 Number of withdrawals (n) = 1 year = 12 months r = 6.24% per annum = ...

Q: Ligaya places Ph 6,553 in a BDO account that accrues interest compounded continously. Ligaya did not...

A: Amount placed initially (X) = Ph 6553 Interest rate for the first 5 years (i) = 5.89% compounded con...

Q: According to the Modern Portfolo Theory, which of the folowing is not an important characterstic of ...

A: Modern Portfolio Theory: It refers to the theory of investment that allows assembling the portfolio...

Q: An indium-gallium-arsenide-nitrogen alloy developed at Sandia National Laboratory is said to have po...

A: Rate of return- the rate that will make present value of all extra revenue equal to investment.   Da...

Q: Consider a 10-year bond with a face value of $1,000 that has a coupon rate of 5.8%, with semiannual ...

A: Bond price implies for the consideration paid by an investor for acquiring bond. In provided case, b...

Real Estate

Real estate means ownership of land along with the assets and natural resources that exist on the land. These properties are in real/physical form which is tangible. Real estate simply means land or addition made to land permanently like constructing a residence or different buildings. People invest in real estate to either reside or for wealth creation. Many people investing in real estate further lend the place for occupation or businesses in return for a monthly payment.