Fin 516 Week 1
A. What is the ex-dividend price of a share in a perfect capital market?
250/500=$0.50 per shares (the perfect capital market the price will drop $14.50)
B. If the board instead decided to use the cash to do a one-time share r
Fin 516/Week 2 Homework
A. According to MM Proposition I, what is the value of the equity? What are its cash flows if the
economy is strong? What are its cash flows if the economy is weak?
Cash flow=(1400, 900)-
FIN516 WEEK 3 - HOMEWORK
Problem 20-6 on Call Options based on Chapter 20
(Excel file included)
You own a call option on Intuit stock with a strike price of $40. The option will expire in
exactly 3 months time.
a. If the stock is trading at $55 in 3 month
FIN516 WEEK 5 - HOMEWORK
Problem 25-6 on Purchase versus Lease based on Chapter 25
Craxton Engineering will either purchase or lease a new $756,000 fabricator. If
purchased, the fabricator will be depreciated on a straight-line basis over 7 years.