Common stock valuation | Business & Finance homework help


 

 

 

 

 

 

 

  1.  (Floating-scold advances). The Bensington Glass Company entered into a advance concord delay the established’s bank to finance the established’s started principal. The advance denominated for a shapeless scold that was 27 basic points (0.27 percent) aggravate an refutation installed on LIBOR. In adduction, the advance adjusted weekly installed on the stagnation prize of the refutation for the earlier week and had a culmination annual scold of 2.24 percent and a narrowness of 1.72 percent. Reckon the scold of portion-out for week 2 through 10.

     

     

 

Date

LIBOR

Week 1

1.94%

Week 2

1.59%

Week 3

1.55%

Week 4

1.32%

Week 5

1.59%

Week 6

1.66%

Week 7

1.69%

Week 8

1.94%

Week 9

1.88%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The scold of portion-out for week 2 is ………%

 

 

 

  1.  (Bond valuation) Reckon the prize of a obligation that matures in 17 years and has a $1,000 par prize. The annual coupon portion-out scold is 15% and the market’s required relinquish to ripeness on a similar miss obligation is 14 %.

     

    The prize of the obligation is ……..

     

     

  2.  (Common supply valuation). Header Motor, Inc.., compensated a $4.43 dividend developed year. At a fixed enlargement scold of 5 percent, what is the prize of the spiritless supply if the investors requested a 10 percent scold of reappear?

     The prize of the spiritless supply is $......

     

     

     

     

     

     

     

     

     

     

  3. (Common supply valuation) The spiritless supply of NCP compensated $1.41 in dividends developed year. Dividends are expected to expand at an annual scold 6.60 percent for an unceremonious reckon of years.

 

  1. If your required scold of reappear is 8.70 percent, what is the prize of the supply for you?

  2. Should you fashion the bombardment?

 

  1. If your required scold of reappear is 8.70 percent, the prize of the supply for you is $.....

     

     

 

  1. (Related to Checkpoint 10.1)  Relative valuation of spiritless supply). Using the P/E affinity entrance to valuation, reckon the prize of a portion-out of supply lower the forthcoming provisions.

    1. The investor’s required scold of reappear is 13 13%

    2. The expected equalize of hues at the end of this year ( E1) is $7,

    3. The established follows a prudence of fostering 60 % of its hues,

    4. The reappear on equity (ROE) is 13%, and

    5. Similar portion-out of supply vend at multiples of 7.693 times hues per portion-out,

       

      Now parade that you get the similar counterpart using the discovered dividend mould.

       

 

  1. The supply worth using the P/E affinity valuation manner is $.....