Tag: Economics

I’m working on a Finance exercise and need support.

Prior to working on this discussion, watch these videos:

• American Call Options (Links to an external site.)
• American Put Options (Links to an external site.)
• Forward Contract Introduction (Links to an external site.)

Generate two multiple choice questions that you think could appear about these topics on an assignment that is similar in nature to the CFA. Post your questions to the discussion board.

25 questions finance – must be an expert it: stock valuation, corporate valuation, bond valuation, weighted average cost of capital, cash flow determination, capital budgeting. Ill have a good amount of time to finish 25 questions and need guidance to understand–will tip for A!!

Q1. NTL Company is issuing eight-year bonds with a coupon rate of 6.5 percent and semiannual coupon payments. If the current market rate for similar bonds is 8 percent, what will be the bond price? If the company wants to raise $1.25 million, how many bonds does the firm have to sell? 1 mark

Q2. Suppose a 3-year bond with a 6% coupon rate that was purchased for $760 and had a promised yield of 8%. Suppose that interest rates increased, and the price of the bond declined. Displeased, you sold the bond for 798.8 after having owned it for 1 year. What is the realized yield? 1 mark

Q3. Ahmed is interested in purchasing the common stock of Inch, Inc., which is currently priced at $ 40. The company is expected to pay a dividend of $3 next year and to grow at a constant rate of 8 percent. 1 mark

a. What should the market value of the stock be if the required rate of return is 15.75 percent?

b. Is this a good buy? Why or why not?

Q4. Briefly compare the NPV, PI, and IRR criteria. What are the advantages and disadvantages of using each of these methods? 2 marks

I’m working on a finance presentation and need an explanation and answer to help me learn.

Presentations regarding costs of Capital  (healthcare financing).

calculate the PV of NCF for “Scenario: No Real Options”, which stands for Present Value of Net Cash Flow. And i need the same thing done for “Scenario: Real options.” I also need to know the formula that is used to conduct the final solution. From my understanding, you are supposed to use the Black-Scholes Option Pricing formula.

For reference, here is what the problem set says:

A. JTM Airlines is looking at buying more gates at their home airport. JTM’s discount rate is 5.5% and the risk free rate is 2.0%. What is the NPV of the gate purchases if it boughtthem today? Use the data in the Excel template provided.

B. After you run the numbers for part A, you remember back to the concept of realoptions, which means that JTM can make investment decisions as time passes:

1. Present valuing the purchase price of the gates (that is, the years 1 and 2 Capital Expenditures) separately using the risk-free rate. Once JTM decides to go ahead with the purchase, there is no risk to that expenditure.

2. Present valuing the Net Cash Flow excluding those purchase prices. Thiscalculation will include Cap. Ex. for years 3-15 as they are part of the normaloperation of the gates and are unrelated to the purchase price.

3. Use the Black-Scholes Option Pricing formula to come up with option’s priceassuming a 2-year maturity and a 15% price volatility for gate prices.

4. Compare the price of the call option with the NPV in the No Real Optionsscenario. Is the option worth it?

Putting theories into practice–

Please pick one or some specific concepts we learnt each week, illustrate how will you practice these concepts on a specific case that you can find. Requirement: Please provide: details of the reasons you choose a topic or concept; details of any case (personal experiences, news, articles, reports, research papers,etc.) you choose; and how the theory of decision making is reflected in this case; at least 2 (double-spaced, 12pt-font) pages not including title page, not including tables and charts (but you are welcome to include them). Citation is needed for cites. APA writing format is preferred but not mandated.

The chapter is on Utility. I will provide the powerpoint so you can see the material and choose what you want to write about. As for the case study, you can choose any news, articles, or research paper that relate to the chapter.

Watch YouTube and read pdf file, after select (highlight) the correct answer from the multiple choice in word document. https://www.youtube.com/watch?v=jrW5pToOtac

be as rigorous as you can in your analysis. For instance don’t forget to run your tests using the procedures we described, always discuss the significance of coefficients, and when you do algebra, justify all your steps one by one! Once you reached a conclusion, discuss the results you got and the economic meaning. To get full points, many questions are asking you for both an econometric discussion (algebra, maths so on) and an economic interpretation (why the hell have you been through this awful algebra?)

be as rigorous as you can in your analysis. For instance don’t forget to run your tests using the procedures we described, always discuss the significance of coefficients, and when you do algebra, justify all your steps one by one! Once you reached a conclusion, discuss the results you got and the economic meaning. To get full points, many questions are asking you for both an econometric discussion (algebra, maths and so on) and an economic interpretation (why the hell have you been through this awful algebra?)