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?