6-2 Determinants of Interest Rates for Individual Securities
You are considering an investment in 30-year bonds issued by Moore Corporation. The bonds
have no special covenants. The Wall Street Journal reports that 1-year T-bill are currently earning
a1.2
HW 2
4-32 Solving for Time How long will it take $2,000 to reach $5,000 when it grows at 10 percent
per year?
FVN = PV (1 + i)N
5,000 = 2,000 (1 + 0.10)N
(1.10)N = 5/2 (the thousands cancel)
ln (1.10)N = ln 2.5
N ln 1.10 = ln 2.5
N = ln 2.5/ln 1.10 = .916
Monika Abreu
CHAPTER 1 PG 29-30 LETTER C.
1. By Embracing citizenship goals, assess whether corporations can insulate themselves
from many activist actions, thereby avoiding negative media events.
-Corporations cannot necessarily avoid any activist proble
FIN 3403
Financial Management
CH 6
DISCOUNTED CASH FLOWS AND VALUATION
Learning Objectives
1. CASH FLOWS OCCURRING AT DIFFERENT
TIMES MUST BE ADJUSTED TO REFLECT THEIR
VALUE AS OF A COMMON DATE
2. CALCULATE THE PRESENT VALUE AND THE
FUTURE VALUE OF AN ORD