Bond Pricing (all bonds are compounded annual for problems below)
1 Price this Bond:
Face Value of $5000
yield of 4%, maturity in 10 years
2 Price this Bond:
Face Value of $10000
yield of 3%, maturity in 10 years
3 Price this Bon
FNBSLW 401 02
November 3, 2016
This disability income section describes the details regarding Mr. and Mrs. Clients
income needs in the event of disability. Mr. and Mrs. Clients information reveals the tot
Actual cash value = replacement cost depreciation
1/1/2010 Buy couch $750
12/31/2015 to buy a new sofa $850
. you have homeowners insurance
depreciation rate 10% per year
ACV = $850 (.10*$750) *6) = $400
Fair market value: price willin
21 Years Old
2006 Jeep Liberty
1. Allstate provided a quote of $508 (6 months) and GEICO provided a quote of $281.07 (6
months). GEICO provided a discount for Good Student, seat belt, good driver, anti-lock
brakes, anti-theft device,
Ch. 10 Financial Investments
Investment risk - the risk principally associated with savings placed in financial assets-the
chance of a decline in asset value, typically measured by its market price.
Insurance risk - Primarily associated with possible dete
Ch. 11 Risk Management
Risk Management in theory - The study of methods for controlling portfolio risk.
Risk Management in Practical Terms - The process by which we identify risks and control them
so that we are able to achieve individual goals.
Ch. 9 Real Estate and Other Assets
Unique physical characteristics
Factors of Affordability:
Liquid assets and debt accumulated
Ch. 12 Other Insurance
Business Risk - A risk taken for potential reward.
Coinsurance - Indicates that the policyholder pays a certain percentage of the outlay along with
the insurance company, often subject to an overall cap on payments by the holder.
Ch. 13 Retirement Planning
Annuitization - A process of converting a lump-sum asset accumulated into the payment of a
fixed flow of income per year often based on life expectancy.
Defined Benefit Plans - Pension structures that provide a stated stream of
Ch. 8 Household Investments
Financial Assets - Those whose ownership is represented and traded solely through pieces of
Often maintain or increase in value over time, particularly when the cash they generate
Often fully marketable.
Please address all questions under the mini-case on page 89-91 of the textbook. Provide your answers in the space provided below. This is an individual work and any type
of collabration among students will result a "F" grade for the course for both party
Caterpillar Inc (CAT US)
In Millions of USD except Per Share
12 Months Ending
+ Cash, Cash Equivalents & STI
+ Accounts Receivable, Net
+ Notes Receivable, Net
+ Prepaid Expenses
+ Deferred Tax Assets
+ Misc ST Assets
Predicted sales for 2016
sales growth for 2017-2021
Gross profit margin
AR plus accrued expenses/sales
AP plus accrued expenses/sales
ST borrowing rate
LTD borrowing rate
Cost of Debt
Cost of Equity
Nestle's Estimated WACC:
Cost of Debt
Cost of Equity
New Nestle Estimated WACC:
This case illustrates the capital structure decision for a firm
that begins with zero debt financing. The numerical analysis
assumes that all cash flows are perpetuities.
The model uses income statements to
Background Aspeon Sparkling Water
Aspeon Sparkling Water is water bottle manufacturing company that independently sells their
product through a wide variety of distributors in the United States. The CEO of the company
would like to avoid debt in its capit
COLA WARS IN CHINA: A FUTURE IS HERE
Wahaha like other companies who found difficulty in the soft drink industry
realized there will be barriers it had to overcome to beat out opponents like Coca Cola,
and Pepsi. Zong Qinghou the
DIVISION OF PUBLIC HEALTH
Dennis G. Smith
1 WEST WILSON STREET
P O BOX 2659
MADISON WI 53701-2659
State of Wisconsin
Department of Health Services
To Whom I
Basic Tax Calculation
A. GROSS ESTATE
$250,000 Life insurance payable
$5,600,000 Sole proprietorship
Total gross estate: $6,455,000
B. ADJUSTED GROSS ESTATE
Total gross esta
Mark X Company Strengths.
Current assets have gone up from 73.61% to 83.16% from 1990 to 1992.
Long term debt has decreased from 16.52% in 1990 to 12.39% in 1992.
DuPont Identity = Profit margin (income/sales) x Total asset turnover (Sales/assets) x
YTM = 2.813% 2 = 5.63%
And the aftertax cost of debt is:
RB = (1 .35)(.0563) = .0366, or 3.66%
Now we have all of the components to calculate the WACC. The WACC is:
RWACC = .0366($5,250,000/$15,400,000) + .1270($10,150,000/$15,400,000) = .0962, or 9.62%
Case #11 Question: 1
One major factor that lead to the failure of HMSI was the un-fair treatment of the
workers. Employees were expected to adhere to strict regulations. One example of this was
found with employees
Final Exam Take Home
Between AutoZone, and OReilly Automotive Inc the company with the higher cost of capital is
OReilly Auto. OReilly Auto had a 5.813% weighted average cost of capital compared to AutoZone which
had a 5.
For every position:
Baseball IQ/ Knowledge
Quick, strong arm, range (ability to cover a lot of space in a short amount of time), athletic,
accuracy, good hands/reaction time, plays the ball (ball doesnt play hi
Ch 9 Stock Valuation
Po = Div1 + Div2
Constant Dividend Model
Assumption 1: R is constant.
Assumption 2: Dividend is constant.
Po = Div
Constant Growth Model
Assumption 1: R
Mark X Company Manufactures farm, specialty horse, and boat trailers.
They have just been issued a deficiency report.
Current (2), Quick (1), and Debt (55%) contractual obligations were all not met.
Loans could potentially be called.
Must show Sen