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at this price buyers want to purchase 40,000 burgers less than the 60,000 hamburgers producers are willing to offer graph the market surplus occurs explain the market surplus among the seller
ABBA Corp has issued ABBA Bond on discount on April 6, 2010. This 8 percent bond is
redeemable at par on April 6, 2030, or on any optional redemption date. The expected
yield of the bond on the date of issue was 10 percent p.a. Coupon for the bond is paid
quarterly. The earliest possible ABBA Corp could redeem the whole bond (but not in part)
is at the end of its 12-year deferment period with a 12 percent call premium. An investor
has decided to purchase this bond today, December 21, 2019, when the interest rate has
increased by 2 percent (from the last known rate).
i) Compute his current yield on the date of purchase.
ii) Compute his yield to call.
a) Aspian Tres Bhd issued a bond on March 18, 2019. The terms were as follows:
Currency Denomination Malaysian Ringgit
Denomination/Par Value MYR100,000
Maturity Date March 18, 2029, or an optional redemption date
Redemption/payment basis Redemption at Par Value
Interest Payment Dates March 18
September 18
Optional Redemption Date The issuer has the right to call the instruments in
whole (but not in part) at 10 percent call premium
starting March 18,2024 with a reducing premium of
200 basis point annually thereafter.
Interest Rate Fixed rate of 6% for the whole term of bond
A fund manager with XYZee Fund in Singapore is considering this bond on November
1st, 2020:
.
i) Compute the amount paid for a unit of this bond in the investor’s local currency if the
expected return on this bond is expected at 6.6 percent and the exchange rate is
SGD1/MYR3.06. (Disregard fees and other expenses)
You uncle heard that real estate investment could yield remarkable return for investor, and he told you that he is offered a mortgage loan of RM 450, 000 with a rate of 4.5% by Bank A to purchase a double-storey terrace house in Semenyih, the loan is scheduled to be repaid in 35 years with a fixed monthly payment. Use the knowledge that you learned in Finance class,
a. Calculate the monthly fixed payment to the bank.
b. Use an amortization table to explain to your uncle the total interest rate that he is going to pay to the bank if he decides to accept the loan.
You planned to buy a stock of company A, given the following information of the stock:
i. Beta of the stock: 1.5
ii. 3 months treasury bill yield: 3%
iii. Market return: 12%
a. Calculate your required rate of return for the stock?
b. Assuming the stock price paid RM 2 dividend last period, and expected to grow at 8 % for 4 years, and a constant rate of 4% after that, what is the expected stock price that you will buy the stock in order to earn your required return?
Given the end-of-month prices for stock X for January 2020 through June 2020,
Month End-of-Month Price
January 2020 15.25
February 2020 16.10
March 2020 16.20
April 2020 15.80
May 2020 15.85
June 2020 16.30
calculate
a. Monthly holding-period return
b. Average Return
c. Standard Deviation
Given the following information for Company A, find the WACC. Assume the company’s tax rate is 21%
i. Debt: 15,000 bonds selling for RM 1080, with a Yield To Maturity 5%
ii. Common Stock: 500,000 shares outstanding, selling for RM 50 per share, the beta is 1.09
iii. Preferred stock: 30,000 shares, paying fixed RM 5 dividend per share, selling at RM 60 per stock
The market risk - free rate is at 3.2% with 7% market risk premium.
Before the Inclusion of Corporate Tax explain why M & M Proposition II suggested that capital structure of a firm does not affect the cost of capital of the firm?
Explain the following (with Example)
a. Interest Rate Parity
b. Purchasing Power Parity
As the Chief Financial Controller, what are the key factors or constraints that you should consider when making decisions on dividend pay out policy?
#340153 on Dec 2023