End of Chapter 11
15. Using CAPM.
A stock has an expected return of 11.2%, a beta of 1.15, and the expected return on the market
is 10.4%. What must the risk free rate be?
CAPM:
Er= rf+B(rm)B(rf)
ErB(rm)= rf B(rf)
ErB(rm)/1B= rf
Rf= .1121.15(.104)/1
End of Chapter 5 Problems
8. Profitability Index: Suppose the following two independent investment opportunities are
available to Relax, INC. The appropriate discount rate is 8.5%.
Year
0
1
2
3
Project Alpha
$2,100
$1,200
$1,100
$900
Project Beta
$3,700
End of Chapter 11 Problems
10. Calculating Portfolio Betas.
You own a stock portfolio invested 15% in Stock Q, 35% in Stock R, 30% in Stock S, and 20% in
Stock T. The betas for these four stocks are .75, 1.90, 1.38, and 1.16, respectively. What is the
por
End of Chapter 4 Problem 36
Youre prepared to make monthly payments of $240, beginning at the end of this month, into an
account that pays 10 percent interest compounded monthly. How many payments will you have
made when your account balance reaches $35,0
End of Chapter Problems
8. Valuing Preferred Stock.
Ayden, Inc., has an issue of preferred stock outstanding that pays a $4.50 dividend every year, in
perpetuity. If the issue currently sells for $87 per share, what is the required return?
Dividend per sh
End of Chapter 4 Problem
11. Wilkinson Co. has identified an investment project with the following cash flows. If the
discount rate is 10%, what is the present value of these cash flows? What is the present value at
18%? At 24%?
Year
1
2
3
4
675
880
980
1
End of Chapter 9 Problems
17. Negative Growth.
Antiques R Us is a mature manufacturing firm. The company just paid a dividend of $13, but
management expects to reduce the payout by 4 percent per year, indefinitely. If you require a
return of 10 percent on
End of Chapter Problem
8) B&B has a new baby powder ready to market. if the firm goes directly to the market with the
product, there is only a 55 percent chance of success. However, the firm can conduct customer
segment research, which will take a year an
University of Texas Rio Grande Valley
Department of Physics
Astronomy 140104 Syllabus (Spring 2017)
Instructor: Satya Kachiraju
Email: [email protected]
Office: SCNE 3.162
Phone: 9566652578
Office Hours: MW1:45 to 2:45 pm at SCNE 3.162,
Assignment 2: FINA 3380.03 Fall 2016
1. Your company has an average collection period of 40 days and accounts receivables of
$315,000. What are the companys annual sales?
a. $12,600,000
b. $1,754,808
c. $2,874,375
d. $315,000
Annual Sales/365 = Av. daily
Homework 4 Stock Valuation
UTRGV / Due on October 10, 2016
1. Suppose an investor is considering the purchase of a share of the Utah Mining Company. The stock
will pay a $ 3 dividend a year from today, this dividend is expected to grow at 10% per year (g=
Homework 3 Bond Valuation
Fall 2016
Due on September 26, 2016, Monday
1. A bond has a quoted price of $ 1,080.42. It has a face value of $ 1,000, a semiannual
coupon of $ 30, and a maturity of 5 years. What is YTM?
4.2%
2. Suppose the ABC Company were to
Homework 5
Risk, Return, and CAPM
Due on October 24, 2016
Q1 The Ritter Co. stock is expected to earn 15% in a booming economy recession, 8% in a
normal economy, and lose 3% in a recession economy. The probability of a boom is 38% while
the probability of
NAME:
PROBLEM SET 1
Chapter 1  Introduction to Healthcare Financial Management
Assigned Problem 1
Johnson Family Care Inc. is a large ambulatory care center that provides comprehensive 24hour
primary and specialty care to a large suburban population in
Internal
Managers
External
Creditors: look for trustworthy if payback
Shareholders: return of investments
Government
GAAP: Generally Accepted Accounting Principles
The rules used in the US to report to calculate and report information in the financia
FINA 3380
Homework Set 1 Scratch Paper (Chapters 1, 2, and 3)
Instructions
(1) This homework set has 50 questions worth one (1) point each.
(2) Print out this scratch paper and start working on the homework as each chapter is covered.
(3) Submit your a
FINA 3380
Homework Set 2 Scratch Paper (Chapters 4, 5, 6, and 7)
Instructions
(1) This homework set has 60 questions and is worth a total of 50 points. Each concept question
is worth half (0.5) point and each quantitative question one (1) point.
(2) Print
Homework Set 4 (Not graded)
Final exam preparation
Answers are in italics
General advice
Before the exam
Read the chapters; Specifically review the definitions provided in the textbook
margins
Review the definition of each financial ratio
Review the sl
Chapter 2 MiniCase
Financial Statement and Cash Flow Analysis
You have been hired by First Citizens Bank as a financial analyst. One of your first job assignments
is to analyze the present financial condition of Bradley Stores, Incorporated. You are provi
What is Depreciation?
Buildings, machinery, equipment, furniture, fixtures, computers, outdoor lighting, parking lots,
cars, and trucks are examples of assets that will last for more than one year, but will not last
indefinitely. During each accounting pe
Corporate Income Tax
$50,000 x 0.15 = $7,500
($75,000  $50,000) x 0.25 = $6,250
($100,000  $75,000) x 0.34 = $8,500
($150,000  $100,000) x 0.39 = $19,500
Tax bill = $41,750
Average tax rate = $41,750/$150,000
= 0.2783 or 27.83%
If the firm earns $1 mor
Double Taxation Example 1
If a corporation has pretax earnings of $110,000
while the corporation is subject to a 35% income
tax rate and an investor is subject to a 35%
personal tax rate and a 15% capital gains tax
rate, then what is the aftertax income
Chapter 01 Introduction to Corporate Finance Answer Key
Multiple Choice Questions
1. This book is mainly about:
A.
financial decisions made by corporations.
B. financial decisions made by households.
C. financial decisions made by governments.
D. financia
FINA 3385.01 Fall 2014 Exam 3
Name:_ ID:_
1) Which of the following statements is (are) true regarding renters insurance?
I. Renters insurance is needed if you rent a house, but is not needed if you rent an
apartment.
II. The ISO renters policy provides a
Cash Flow Analysis and Capital Budgeting
The capital budget of a firm is the cash a firm has to purchase capital goods or to invest in capital
projects.
In economics and finance capital is defined as plant and equipment, tools, machines, and intellectual
1.
a. Robert Williams should not retire early because the
present value of his cash flows is $1,713 greater than the $500,000
offer.
2.
c. Ruth should take the second offer for the series of
payments because it has a higher present value than the $1,000,0
INTRODUCTION TO FINANCE TVM Handout
1. What is the FV in 5 years of $1,500 deposited today in a CD paying 6.5% compounded annually?
a. Compounded semiannually?
b. Compounded quarterly?
c. Compounded daily?
2. How much should you deposit today in a savings
Bonds

Zero coupon bonds: these bonds have a coupon rate of zero, i.e. they do not pay coupon
payments over the life of the bond.
Zero coupon bonds always sell for a discount, i.e. for less than par value.
Calculate the price of the following zero coupon
Maria Gomez
FINANCE CH 2
RATIOS
LIQUIDITY RATIOS: show the ability to meet shortterm obligations.
1. Current Ratio: Current assets
Current liabilities
2. Quick Ratio: Current Assets Inventory
Current liabilities
3. Cash Ratio: Cash
Current liabilities
AC