Finance Answers

How does an increase in the value of the pound sterling

affect American businesses?

Is everybody worse off when interest rates rise?

When the dollar is worth more in relation to currencies of other countries, are you more likely to buy American-made or foreign-made jeans? Are U.S. companies that manufacture jeans happier when the dollar is strong or when it is weak? What about an American company that is in the business of importing jeans into the United States?

How does a fall in the value of the pound sterling affect British consumers?

What effect might a fall in stock prices have on business investmen

What effect might a fall in stock prices have on business investment?

What is the typical relationship between interest rates on three-month Treasury bills, long-term Treasury bonds, and Baa corporate bonds? 

Is everybody worse off when interest rates rise?

Built-Rite Corp is evaluating an extra dividend versus a share repurchase. In either case $20,000 would be spent. Current earnings are $6.0 per share, and the stock currently sells for $40 per share. There are 4,000 shares outstanding. Ignore taxes and other imperfections in answering parts (a) and (b).

a.  Evaluate the two alternatives in terms of the effect on the price per share of the stock and shareholder wealth. 

b.  What will be the effect on Built-Rite Corp’s EPS and PE ratio under the two different scenarios? 

c.  In the real world, which of these actions would you recommend? Why?  

A north american bond pays semi-annual cooupons of 20$ and matures in 10 years. The current YTM is 5% and the face value is 1000$. What will be the price of this bond in 3 years, if the YTM in 3 years is 100 basis points higher than thw current YTM.