## Problem set

Financial analysis代写 required rate of return for IBM stock is 12%; 1 year Treasury bills are yielding 5%; inflation rate is 2%.

### Questions 1 and 2 are based on the following information: required rate of return for IBM stock is 12%; 1 year Treasury bills are yielding 5%; inflation rate is 2%.Financial analysis代写

1. #### Calculate the duration and modified duration of the following:

i. GE’s AAA-rated zero coupon bond with 10 years to maturity.  Other AAA rated 10 year bonds are yielding 5%.

ii. WMT’s 3 year 6% coupon bond.  The bond’s Par value is 1000 and its YTM is 5%.

1. #### What is the modified duration of an equally weighted portfolio of GE and WMT bonds (from 4)?

What does this number represent to fixed-income portfolio managers?Financial analysis代写

1. #### The Slipperyrock Bank has money-market deposit rate of 3 percent compounded quarterly.

It will take ________ years to double your money.

1. #### I bought a 30 year coupon bond this morning at \$1000 (par value is \$1000).

At what price can I sell it this afternoon, if yields on these bonds have fallen from 7% this morning to 6.5% this afternoon?Financial analysis代写

1. #### Find the value of the following stocks:

i. The Preferred stock of SBAS Corp. pays an annual dividend of \$2.5. The required rate of return on the stock is 18%.

ii. The Common stock of SBAS Corp. pays an annual dividend of \$3.0. Dividends are expected to grow at 4%. The beta of SBAS is 1.3, the average return on the S&P500 over the past 70                           years is 9%, and the 30 year T-bond yield is 3.5%.

1. #### Find the value of a 15 year bond issued by Webbedfoot & Co. given the following information: Coupon: 7.5%

•                Payment of coupon: Annual
•                Risk free rate of return: 3%
•                Risk premium on Webbedfoot bonds: 8%.

1. #### You have just financed a Jaguar priced at \$42,000.

The loan requires annual repayments over 3 years.  The annual percentage rate on the purchase is 10%.  Write out the amortization schedule for the purchase.  The schedule should contain                annual total payments, annual interest payments, annual principal payments and end of year balances.Financial analysis代写

Questions 12-14 are based on the following Income Statement data for RuNutz Corp: Revenues = \$50 million; Cost excluding depreciation = \$7 million; Depreciation = \$3 million; Interest                Expense = \$0.5 million; Tax rate=30%; Preferred Dividends = \$1 million; Common Dividends = \$2 million.  The company has 7 million common stocks outstanding, and 1 million stock                    options that are likely to be exercised; the current stock price is \$10 and the Strike price is 2.Financial analysis代写

1. #### Pekoe Corporation has a Market/Book ratio of 3 and a current stock price of \$20.

Its book value of assets is \$200 million, and its liabilities are stated at \$100 million.  Pekoe has____ stocks outstanding.Financial analysis代写

1. #### The Dow was at 80 in 1930 and is at 10,000 80 years later.

The annually-compounded  geometric rate of return is_________, and the continuously compounded rate of return is _____________.

1. #### * Nike Corporation is paying 7% APR on their senior notes with interest due on a quarterly basis.

The company faces an effective rate of interest of _________.

1. #### *I invested \$1000 in a stock portfolio 5 years ago.

I contributed another \$1000 3 years ago.  The current value of the portfolio is \$6000.  What is my dollar weighted rate of return  (internal rate of return)?Financial analysis代写

1. #### Answer both parts of this question:

i. An asset will start paying annual dividends 5 years from today.  The first ten dividends will be \$1000 each.  Starting on the 15thyear, the asset will pay \$2000 annually per year forever.                       The beta of this asset is 1 and the expected return on the Market portfolio is 10%.  Establish the fair value of this asset.Financial analysis代写

ii. You expect to put away (invest) 10% of your income every year.  Your income was \$100,000 last year, and it is expected to grow at 5% annually.   You will put your money in a fund that                      mimics the S&P 500 index whose historic return is 10%.  How much do you expect to have at the end of 25 years (when you retire)?Financial analysis代写

#### 20. Systematically present the elements of the 3 key financial statements.

For each, indicate the problems that a financial analyst would run into when dealing with accounting treatment of R&D.

1. #### Using a Bloomberg Terminal, download (at least some) relevant financial information for fundamental analysis and/or technical analysis for the firms you are analyzing.

Please show evidence that that information gathered is from a Bloomberg Terminal. (You could take a snapshot of the screen or submit a Bloomberg/Excel file)

1. #### Using a Bloomberg Terminal or Yahoo Finance, download 3 years of daily price history for the S&P 500 and for the companies you are analyzing for your final report.  Run appropriate regressions (having checked for data synchronicity) to obtain:

a. Regression R2for the two regressions.

b. α and β for the two companies.

Use the Sharpe Ratio and Treynor Ratio to assess whether your 2 stocks outperformed the S&P 500 over the interval in the “risk-return sense.”Financial analysis代写

1. #### Using the “amortization” file provided on Moodle as guide, please produce in Excel an amortization schedule for the following loan:

15 year loan

Loan amount: \$540,000

6.5%APR

Equal Monthly payments

Show how the payment schedule will change if you decide to make a single lumpsum payment of \$20,000 over and above your scheduled monthly payment on the 24th month.   Financial analysis代写 QQ在线咨询

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