Question 1
#
Baskets /
Hour
Price
A
0
B
1
C
2
D
3
E
4
F
5
T
Revenue T Cost
0
13
13
13
26
13
39
13
52
13
65
10
15
22
31
44
61
T Profit MC
-10
-2
4
8
8
4
5
7
9
13
17
Enter your responses as whole numbers. Indicate negative responses with a (-) negative sign
3). In order to value a firms equity using the flow-to-equity approach, discount the cash flows
available to equity holders at the cost of the firms levered equity. The cash flows to equity holders
will be the firms net income. Remembering that the compan
1)
A St. Johns alum wants to set up a scholarship fund to pay $400,000 per year to cover the tuition of 10 students (based on 2015 levels of about $40,000 per student).
a) The investment managers hired by St. Johns to invest the money believe they can del
Part a
Bonds
current market rate the company is
8.00% paying on its debt.
34%
5.28% Cost of debt*(1-tax rate)
Cost of debt
Tax rate
After tax cost of debt
Preferred Stock
Preferred Dividend
Price of preferred stock
$
$
NOTE: The rate applied to determine
Investors always try to maximize their wealth and hence they keep on searching for the better
investment opportunities depending on their risk taking behaviour. Sometimes, there exists a
mismatch in the prices of some assets (physical or financial) in a m
2).
If the original distribution for X (the population) is not normal , or is unknown, you cant automatically say the sample mean (X ) has a normal distributio
But you can use a normal distribution to approximate the distribution of X if the sample size i