rank the companies from greatest increase in net income between 2019 and 2020 to lowest increase in net income.

Q: Which of the 3-5 year notes might be considered cheap?   Group of answer choices O. HON 3.25…

A: The yield is the annual interest payment that a bondholder will receive, expressed as a percentage…

Q: Stocks A, B, and C have the same expected return and standard deviation. The following table shows…

A: Portfolio:A portfolio is a collection of financial assets, such as stocks, bonds, and other…

Q: Consider the following bonds Which of the bonds A to D is most sensitive to a 1% drop in interest…

A: Bonds are debt instruments issued by companies. Bond holders are paid periodic coupons. The value of…

Q: A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a…

A: FROM THE INFORMATION PROVIDED IN QUESTION WE HAVE TO FIND OUT INVESTMENT OPPORTUNITY SET OF TWO…

Q: a $100,000 investment yields an annual return of $11,730.82 the first year; thereafter, annual…

A: Payback period is the period required to recover the initial amount of investment in the project but…

Q: Susan starts an electric bicycle company with her savings of $200,000. Her new business is…

A: Post Money Valuation:The complete value of a company immediately following an investment is referred…

Q: O Figure (2) shows an investor that borrows in risk-free rate and invests in the risky asset. O…

A: The green curve is indifference curve Region above that has higher risk and region below it has…

Q: What is the effective annualized rate compounded continuously that is equivalent to 16.000% per…

A: First, let's determine the effective annual rate (EAR) for a 16.000% per annum rate compounded…

Q: What is the yield to maturity of a 25-year bond that pays a coupon rate of 6.47 percent per year,…

A: Time = nper = 25 YearsCoupon Rate = 6.47%Face Value = fv = $1000Current Price of Bond = pv = $1037

Q: "Using the expectations theory of the term structure, it is better to invest in one-year bonds,…

A: The theory of expectation states that the investor will enjoy a similar yield if the investment is…

Q: estimate that the stock has a required rate of 18%. What is the intrinsic value of this stock?

A: The constant growth model is a stock valuation method used in finance to determine a stock's…

Q: Martin Enterprises needs someone to supply it with 175,000 cartons of machine screw per year to…

A: NPV is most used capital budgeting method based time value of money and is the financial break even…

Q: The NPV using the cost of capital of 7.6% is $ million. (Round to three decimal places.).

A: We can determine the NPV using the formula below:NPV = PV of cash inflows - PV of maintenance costs…

Q: what is the value of the annuity today

A: We can determine the PV of annuity to year 3 and then discount it to year 0 using PV formula. r =…

Q: You would like to borrow $800,000.00 to buy a home. The bank offers you a 30 year fully amortizing…

A: Loan amount = $ 800000Number of years = 30Number of months= n= 30*12 = 360Monthly rate = r = 6%/12 =…

Q: Njenge is a special purpose vehicle set up by the Football Association of Zambia (FAZ) and the…

A: Capital Budgeting is used by businesses and organizations to evaluate and select long-term…

Q: A Treasury bond due in one year has a yield of 5.7%; a Treasury bond due in 5 years has a yield of…

A: The default risk premium refers to the increased yield that the investor would agree to by…

Q: Following is information on two alternative investments projects being considered by Tiger Company.…

A: 1.NPV means Net present value.It is a capital budgeting technique used for making investment…

Q: Tulsa Drilling Company has $1.7 million in 14 percent convertible bonds outstanding. Each bond has a…

A: Coupon Rate = 14 % Par Value = $ 1000,Tenure = 10 years,Conversion Ratio = 40 and Stock Price = $…

Q: A stock priced at 50 can go up or down by 10 percent over two periods. The risk-free rate is 4…

A: American put is an option that gives the option holder the right to sell the asset at a specified…

Q: Are the following true or false? Explain. Stocks with a beta of zero offer an expected rate of…

A: False. Stocks having a beta of 0 do not have a zero expected rate of return.. The sensitivity of a…

Q: Frank and Farrah, who are twins, ask you to research an issue for them. Both are starting new jobs…

A: We can determine the difference in future value using the formula below:In the formula above PMT =…

Q: Rogot Instruments makes fine violins and cellos. It has $1.8 million in debt outstanding, equity…

A: Capital Structure :Debt capital = $1.78 MillionEquity capital = $2.9 MillionTotal Capital = $1.8 +…

Q: Could the equilibrium rf be greater than 7.00%? Yes No

A: When two stocks are perfectly negatively correlated to each other, they would provide a return equal…

Q: Replacing old equipment at an immediate cost of $75,000 and an additional outlay of $10,000 six…

A: The NPV of a project refers to the measure of the profitability of the project calculated by…

Q: is currently considering investing in municipal bonds that earn 8.55 percent interest, or in taxable…

A: Municipal bonds are tax free That means no taxes are to be paid on the interest income but corporate…

Q: hat is the expected return on the optimal risky portfolio?

A: Optimal risky portfolio is the portfolio that gives the highest possible return for the lowest risk.…

Q: a) What is the DPBP for the investment? Show your answer to 2 decimal places. b) Based on a 10-year…

A: The time it takes for an investment to recoup its initial cost is measured using the discounted…

Q: The Group CFO of Munitenge Bwino Plc is exploring investment options on the €200,000 the company was…

A: Forward Contract and Options contractBuying or selling an object at a fixed price at a specific…

Q: A relative has promised to pay you €5,160 at the end of each of the next 25 years. If you invest…

A: FV = A * whereFV = future value of annuityA = periodic investmentsr = interest raten = time period

Q: Given the information below for StartUp Co., compute the expected share price at the end of 2020…

A: Share price  of 2020 = SPS of 2019 * Average price to SPS ratio *(1+Average growth of SPS)

Q: WHAT IS THE WACC=rs?

A: WACC is a financial statistic used to calculate the average cost of financing a company's…

Q: Stock Y has a beta of 1.4 and an expected return of 15.1 percent. Stock Z has a beta of 0.7 and an…

A: We can determine the risk-reward ratio using the formula below:If the stock's ratio is above the SML…

Q: A price weighted stock index has stocks AAC, BZF, and CHO in it. It is at 550 on 21-Oct-2019. CHO is…

A: We need to compute the value of index after replacement of CHO with DIY

Q: ) A young couple has made a nonrefundable deposit of the first month's rent (equal to $1,000) on a…

A: Sunken cost are costs that have already incurred and payment has been made already made.

Q: . Your parents bought a home 15 years ago and have a mortgage rate of 9% on their $150,000 mortgage…

A: Mortgage loans are secured loans in which loan is secured through home mortgage and mortgage loans…

Q: What are the monthly payments (principal + interest) on a 15-year home mortgage loan of $180,000…

A: Present value of annuity.PV = A * wherePV = Present value of annuity.A = periodic paymentr =…

Q: The half-yearly nominal rate of interest convertible monthly is 5.2%. Calculate the force of…

A: Nominal rate of interest = 5.2%Compounding period = half-yearlyRequired = monthly compounding

Q: Southern Pole is developing a special vehicle for Antarctic exploration. The development requires…

A: Choosing and analyzing long-term investment projects or capital expenditures that need considerable…

Q: Calculate the present value of these cash flows using a 10 percent discount rate. (Do not round…

A: Price of the stock is the PV of all future dividends and horizon value discounted at the required…

Q: First City Bank pays 7 percent simple interest on its savings account balances, whereas Second City…

A: 1. Future value in case of account earning simple interest.FV =  A +IwhereFV = future valueA =…

Q: An investment broker that Ava trusts recommended that she purchase a $50,000, 15-year municipal bond…

A: A bond is classified as a financial instrument that is issued by an organization to raise capital.…

Q: If average daily remittances are $4 million, and "extended disbursement float" adds 8 days to the…

A: Company wants to reduces cash outflow and increase cash inflow because cash money can be invested…

Q: Use your financial calculator to determine the monthly payments for each of the following $213,200…

A: When the borrower borrows a loan from the lender, he has to pay a rate of interest on the borrowed…

Q: Premier, Incorporated, has an odd dividend policy. The company has just paid a dividend of $11.00…

A: Current Dividend = d0 = $11Growth in Price each year for next 4 year = g = $9Required Rate of…

Q: Why is the price $100, when the last price was $1,038.60?

A: I believe that is a typo. The $100 is the redemption value or face value not the price.

Q: Consider a student loan of $10,000 at a fixed APR of 10% for 5 years. a. Calculate the monthly…

A: Here,LoanAmount (PV) is $10,000Interest Rate (r) is 10%Time Period of Loan (n) is 5 yearsCompounding…

Q: Initial Interest Rate Loan Maturity (years) Margin Above Index Adjustment Interval Points Interest…

A: Interest rate riskA rise in the current rates for new debt instruments might result in investment…

Q: You want to create a portfolio equally as risky as the market, and you have $1,500,000 to invest.…

A: Beta of portfolio is computed as follows:-Bp = (Ba*Wa) +(Bb*Wb)+ (Bc*Wc) + (Br*Wr)whereBp = beta of…

Q: Karen Kushida is 25 years old, and intends to retire at age 65. According to the estimation of life…

A: The time value of money can be explained as the foundational principle of finance which states that…

Financial Ratios

A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.

Return on Equity

The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.