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Financial Math
Enter the expression A/p and add slider for both variables (A representing annual dividend and p representing price per share).
Set A = 2, supposing annual dividend is constant, that is, Php 2.
Drag the value of p to the right and observe what happens to the value of A/p.
Drag the value of p to the left and observe what happens to the value of A/p.
1. How does the increase/decrease of price per share affect the value of stock yields?
2. Attach a screenshot of the expression list bar.
3. Research on how emotions affect the stock market and answer the question below.
How does emotional decision making weaken the truth value of the theory of efficient markets?
Set A = 2, supposing annual dividend is constant, that is, Php 2.
Drag the value of p to the right and observe what happens to the value of A/p.
Drag the value of p to the left and observe what happens to the value of A/p.
1. How does the increase/decrease of price per share affect the value of stock yields?
2. Attach a screenshot of the expression list bar.
3. Research on how emotions affect the stock market and answer the question below.
How does emotional decision making weaken the truth value of the theory of efficient markets?
Financial Math
Elias lives in a state with a flat rate inheritance tax of 4.65%. He recently inherited furniture from his aunt that is valued at $13,660. Calculate the amount of inheritance tax that Elias will owe.
Financial Math
Sanjay Bhatia, (age 30 years) works with a pharmaceutical company and has not yet started to invest for his retirement. Sanjay is married to Preeti (age 28 years) and they have one son aged 2 years. Sanjay wants you to prepare a plan for him to retire latest by age 55. (You can make any assumptions to further build up your case.
Financial Math
How long would it take to triple an investment at 4% compounded quarterly
Financial Math
Deposits are made in a geometric progression. Given that 4th and the 7th deposits are 24000 and 192000 respectively. Calculate
1- The 10th deposits
2- The sum of the first 10 deposits
1- The 10th deposits
2- The sum of the first 10 deposits
Financial Math
COMPOUND INTERESTI
Find the future value (compound amount) and the compound interest, as indicated, for
each of the following investments. Round answers to the nearest cent. Use a calculator
or Table 16-1 to find FVF.
Present
Term
Value
Rate
4 years
.S6,000
6% compounded monthly
2. $960
6% compounded semiannually
years
8 years
3.
S20,000
8% compounded quarterly
Find the future value (compound amount) and the compound interest, as indicated, for
each of the following investments. Round answers to the nearest cent. Use a calculator
or Table 16-1 to find FVF.
Present
Term
Value
Rate
4 years
.S6,000
6% compounded monthly
2. $960
6% compounded semiannually
years
8 years
3.
S20,000
8% compounded quarterly
Financial Math
Ken Couch is a student at medical school. He borrowed $24,000 for 18 months at the rate of 9% com-
pounded monthly. How much in total. principal plus compound interest, must Ken repay at the end of
the 18 months?
pounded monthly. How much in total. principal plus compound interest, must Ken repay at the end of
the 18 months?
Financial Math
Marcia Juarez and her brother-in-law have a successful business with several employees. They decide
to borrow $12,000 to pay their next quarterly deposits for payroll tax and federal income tax. They get
the money at 6% compounded monthly and repay all interest and principal after 3 months. How much
do they repay?
to borrow $12,000 to pay their next quarterly deposits for payroll tax and federal income tax. They get
the money at 6% compounded monthly and repay all interest and principal after 3 months. How much
do they repay?
Financial Math
Raj Shah, aged 36 years, is employed with a MNC. His wife Pooja, aged 34 years, is also working part - time. The couple has two children - daughter Rima aged 7 years and son Ansh aged 4 years. Raj and Pooja require your help to make a few financial decisions. (You can make any assumptions to further build up your case)
a. Raj and Pooja want to invest for their children’s higher education for the long term (over 12 to 15 years). Develop a plan so that they can accumulate a sufficient education corpus.
b. Raj wants to take a Life Insurance cover of Rs 1.5 crore. Advise him whether he should go for a ULIP or a term insurance.
a. Raj and Pooja want to invest for their children’s higher education for the long term (over 12 to 15 years). Develop a plan so that they can accumulate a sufficient education corpus.
b. Raj wants to take a Life Insurance cover of Rs 1.5 crore. Advise him whether he should go for a ULIP or a term insurance.
Financial Math
Q # 2: Consider the following information for an unlevered firm U:
EBIT = BDT 1.6 million annually
Unlevered value VU = BDT4 million
Tax rate = 25%
Cost of debt = 12%
A levered firm L in the same business risk class has a debt-to-equity ratio of 0.5. Use the MM propositions to determine:
a. The after-tax cost of equity for firms U and L.
b. The after-tax WACC for both firms.
EBIT = BDT 1.6 million annually
Unlevered value VU = BDT4 million
Tax rate = 25%
Cost of debt = 12%
A levered firm L in the same business risk class has a debt-to-equity ratio of 0.5. Use the MM propositions to determine:
a. The after-tax cost of equity for firms U and L.
b. The after-tax WACC for both firms.
