Finance Answers

The 1.2 million preferred shares of Mighty Machines Ltd., which pay a dividend rate of 6.5 percent on a stated value of $40, are currently worth $42,000,000. What is the risk premium associated with these preferred shares if the risk-free rate is 4.25 percent?

Pharoah Corporation has issued $1 million in preferred shares to investors with a 7.90 percent annual dividend rate on a par value of $100. Assuming the firm pays dividends indefinitely and the required rate is 10 percent, calculate the price of the preferred shares.

Calculate the price change for a 1-percent decrease in market yield for the following bond: par = $1,000; coupon rate = 8 percent, paid semi-annually; market yield = 8 percent; term to maturity = 10 years

Wildhorse, Inc., has bonds outstanding that will mature in 8 years. The bonds have a face value of $1,000. These bonds pay interest semiannually and have a coupon rate of 4.6 percent. If the bonds are currently selling at $909.92, what is the yield to maturity that an investor who buys them today can expect to earn? What is the effective annual yield?

After living in a university residence for one year, Amanda decides to rent an apartment for the remaining three years of her degree. She has found a nice location that will cost $541 per month. Rent for the first and last month must be paid up front.

How much money would Amanda need to have in her bank account right now to be sure she will always have enough for rent? The bank account pays 9.3 percent interest, compounded monthly.

Mike is offered a loan of $20,200 that requires 60 monthly payments of $427.21.

What is the effective annual interest rate on this loan? what would be the quoted rate?

How to calculate PAYG W'hold ?

In 30 years, you plan to set up a fellowship fund for your university that pays out $100,000/year in perpetuity with an annually compounded discount rate of 5%. In order to set up the fund in 30 years, how much do you need to save each year (starting this year) assuming you can get a semi-annually compounded return of 10% on your savings for the next 30 years?

9._______ are those payable to a named payee or some person designed by him.
a.Order Bills
b.Drawer Bill
c.Incomplete Bills
d.Inland Bills

10.All of the following are types of relationships that exists between a customer and a bank except______
a.Bailee or Bailor relationship
b.Manager relationship
c.Agent/Principal relationship
d.Trustee relationship

7.One of the following is not a responsibility or duties of the loan committee
a.Ascertain the reasons for renewal
b.To ensure that loans are given out to all customers
c.Review major loan renewals
d.To review major new loans

8.Discount Houses provide all the following sources of fund_______
a.Deposits
b.Short-term borrowing
c.Reserves
d.Call money