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Unformatted text preview: Course Project Part 1 By Kristin Palmeri Task 1-Assessing loan options for Airjet Best Parts Inc. 1. National first EAR=10.25% ( 1+6.75+3.25/^2)^2-1 Regions Best EAR = 13.99% (1+13.17/^12)^12-1 2. I would take the National first loan because after figuring out the EAR you can see that their rates are lower. 3. $142,002.73 monthly payment Honestly I'm not sure, but if it where me I would probably not take a loan with a monthly payment of this amount because when opening a new factory it would probably be at least a year before it would make any money, so I would want sometime before having to make any payments on this loan. Task 2- Evaluating Competitor's Stock 1. Lockheed Martin corp. Was trading at $80.38, with a dividend of 3.00 and yield of 3.80% on May 19, 2011. Dividend growth model for rate of return is: (3.00/80.38)+ 5%= 9% 2. Current share price of Airjet Best Parts Inc. is: $ 1.50*1.01/.09-.01= $19.94 3. I would say that the preferred stock would be worth more because the preferred stock holders are 3....
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