Financial Math Answers

LSP Co.’s stock price is $58.88, and it recently paid a $2.00 dividend. This dividend is expected to grow by 52% for the next 3 years, then grow forever at a constant rate, g; and rs = 12%. At what constant rate is the stock expected to grow after Year 3?

LSP co. has a preferred stock with an annual dividend of $8.5 per share. If the required return on this preferred stock is 7.5%, at what price should the stock sell?

Company ABC offers a common stock that pays an annual dividend of $3 a share. The company has promised to maintain a constant dividend. How much are you willing to pay for one share of this stock if you want to earn a 10% return on your investment?

find the present value of a 2 year deffered annuity at 4% interest compounded quarterly with payments of P1100.00 made every quarter for 3 years

If you go to an Islamic bank and ask for financing for following purposes, which financial product Islamic bank will most likely to use and why?

1.      10 years financing to start a new project

2.     5 years financing to construct a house on your land

3.     3 years financing for a heavy duty generator

4.     6 months financing for IPhone 12

On December 31, 2010 and 2011 Balance Sheet of ABC Ltd. Shows the following

ASSETS

2011

2010

Cash

7000

4800

Accounts Receivable

8500

9500

Merchandise Inventory

32500

33200

Equipment

30100

24000

TOTAL

78100

71500

EQUITIES

Accumulated Depreciation Equipment

6100

4800

Accounts Payable

16800

19400

Mortgage Payable

6000

10000

Share Capital – Rs. 10 per share

30000

25000

Share Premium

2500

Retained Earnings

16700

12300

TOTAL

78100

71500

Additional Information:

1. A fully depreciated equipment that costs of Rs. 800 was discarded and related accounts were closed.

2. Cash dividend of Rs. 4,000 were declared and paid.

Required: Prepare a Cash Flow Statement. Showing Operating, Investing, Financing activities.

Fifteen transactions or events affecting Drillmasters, Inc., are as follows:

1.     Made a year-end adjusting entry to accrue interest on a note payable that has the interest rate stated separately from the principal amount.

2.     A liability classified for several years as a long-term becomes due within the next 12 months.

3.     Recorded the regular weekly payroll, including payroll taxes, amounts withheld from employees, and the issuance of paychecks.

4.     Made arrangements to extend a bank loan due in 30 days for another 24 months.

5.     Made a monthly payment on a fully amortized installment note payable. (Assume this note is classified as a current liability.)

6.     Called bonds payable due in five years at a price above the carrying value of the liability in the accounting records.

7.     Made a monthly payment on an operating lease.

8.     Made a monthly payment on a capital lease. (Assume only six months remain in the lease term.)

9.     Recorded pension expense on a fully funded pension plan.

10. Recorded no pension post-retirement expense; the liability is unfunded, but 25% of the amount of expense will be funded within 12 months.

11. Recorded income taxes expense for the year, including a considerable amount of deferred taxes (assume deferred taxes are long-term liabilities).

12. Recorded an estimated liability for warranty claims.

13. Entered into a three-year commitment to buy all supplies from a particular supplier at a price 15% below market.

14. Received notice that a lawsuit has been filed against the company for $10 million. The amount of the company’s liability, if any, cannot be reasonably estimated at this time.

Instructions

Indicate the effects of each of these transactions upon the following elements of the company’s financial statements. Organize your answer in tabular form, using the column headings shown below. Use the following code letters to indicate the effects of each transaction on the accounting element listed in the column heading: I for increase, D for decrease, and NE for no effect.                                                                                                                                              

company a pays dividend taka 8 percent share each year will not pay any dividend in next 2 years .After that it will pay taka 10 as dividend per share .That will grow at 6% in year next .and finally that will grown at a constant rate of 10 percent there after .if market interest rate 15%.

What is p0 ,p2,p4,p7

) Repayments on a rental property by the university of Nairobi is done by Kshs. 200,000 at 

time 5, Kshs. 190,000 at time 6, Kshs. 180,000 at time 7 and so on until a payment of 

Kshs. 100,000 at time 15. Assuming an annual effective rate of interest of 3.5%. 

Calculate 

i) The present value of the repayments at time 4 

ii) The present value of the repayments at time 0 

iii) The accumulated value of the repayments at time 15 

Martin has $4,200 in doctor bills for the year. His deductible is $300. His policy pays 80% once he has met his deductible for the year. How much in all did Martin pay including his deductible ?