FINC600 Week 1 Assignment - Homework Problems
FINC600 Week 1 Assignment - Homework Problems Click Link Below To Buy: http://hwcampus.com/shop/finc600-week-1-assignment/ Contact Us: [email protected] Assignment Instructions Complete the following problems in Microsoft Excel. Your work must be completed in the attached template. Chapter 1: 1-6, 1-8 Chapter 2: 2-9, 2-12Chapter 3: 3-3, 3-4 Computations must be solved using Excel. Show all your work to earn partial credit. Essay questions require references.Submit to Assignments by midnight ET, Day 7 (Sunday). 1-6 In most large corporations, ownership and management are separated. What are the main implications of this separation? 1-8 We can imagine the financial manager doing several things on behalf of the firm’s stockholders. For example, the manager might: a. Make shareholders as wealthy as possible by investing in real assets. b. Modify the firm’s investment plan to help shareholders achieve a particular time pattern of consumption. c. Choose high- or low-risk assets to match shareholders’ risk preferences. d. Help balance shareholders’ checkbooks. But in well-functioning capital markets, shareholders will vote for only one of these goals. Which one? Why? 2-9 A. The cost of an automobile is $10,000. If the interest rate is 5%, how much would you have to set aside now to provide this sum in five years? B. You have to pay $12,000 a year in school fees at the end of each of the next six years. If the interest rate is 8%, how much do you set aside today to cover these bills? C. You have invested $60,476 at 8%. After paying the above school fees, how much would you remain at the end of six years? 2-12 What is the PV of $100 received in: A. Year 10 (at a discount rate of 1%) B. Year 10 (at a discount rate of 13%) C. Year 15 (at a discount rate of 25%) D. Each of years 1 through 3 (at a discount rate of 12%)? 3-3 In February 2009 Treasury 6s of 2026 offered a semiannually compounded yield of 3.5965%. Recognizing that coupons are paid semiannually, calculate the bond's price. 3-4 Here are the prices of three bonds with 10-year maturities: Bond Coupon (%) Price (%) 2 81.62 4 98.39 8 133.42 If coupons are paid annually, which bond offered the highest yield to maturity? Which had the lowest? Which bonds had the longest and shortest durations?
