MBS
CMO
Total
Traunch
1
2
3
4
IO
$ 1,000.00
$
80.00
Principal
Notional Interest
Interest Paid
$ 300.00
0.065 $
19.50
$ 250.00
0.0675 $
16.88
$ 200.00
0.0725 $
14.50
$ 250.00
0.0775 $
19.38
121.875
0.08 $
9.75
Total Int Paid $
80.00
Or you can do it this w
Fin 351
Final Exam
Spring 2016
Name (Print)_Andre Cross_
1. JP Corporation is considering a new product which requires a new facility with a cost of $50,000.
The company has paid $10,000 fees to a marketing consultant to investigate the market potential
o
Chapter Fourteen
Bond Prices
Bond Characteristics
Bonds are debt obligations of issuers (borrowers) to bondholders (creditors)
Face or maturity or par value is the principal repaid at maturity,
typically $1,000
The coupon rate determines the interest pa
Evaluation of Choice of Dividends versus Repurchase Shar
Sales growth rate
Costs / Sales
Depreciation / Net PPE
Cash / Sales
Acct. rec. / Sales
Inventories / Sales
Net PPE / Sales
Acct. pay. / Sales
Accruals / Sales
Tax rate
Long Run Growth
Cost of Capita
Assumptions
New Mc Yr1-10growth
5.00%
Old Mc Yr1-10growth
4.00%
Base Year Zero Sales
$
300,000
Cost of goods sold per unit
$
12.00
Unit SP (New)
$
13.20
Unit SP old
$
14.00
Initial Investment in New Equipment $
550,000
Increase in Inventory with new eq
$
Chapter Sixteen
Investment Strategies
Passive Management
As in the stock market, a manager would pursue a passive management strategy if he
or she believes that market prices are correct. That is, there are no mis-pricings,
systematic or unsystematic, tha
The question being asked in this article is Do smokers pay their way? Health taxes on alcohol and
cigarettes imposed by the Federal government of the United States have been an issue for a while. This
paper summarizes research that shows that increased ta
Financial Forecasting Model
Assumptions
Sales Growth
Cost of Debt(short and
long term)
Payout Ratio
Forecast Factors
Taxes
New Funds=Longtterm debt
Forecast Factors
Expenses/Sales
Depreciation/Sales
Cash/Sales
Accounts Receivables/Sale
Inventory/Sales
Fix
Chapter Forty
Valuation of Bonds with
Embedded Options
Callable Bonds and Their Investment Characteristics
The presence of a call option results in two disadvantages to the bondholder:
i.callable bonds expose bondholders to reinvestment risk
ii.price appr
