Financial Ratios Can Be Used To Measure Performance Against Benchmarks. What Kinds Of Comparisons

Financial ratios can be used to measure performance against benchmarks. What kinds of comparisons can be made using this method? What types of ratios can be used to measure performance against benchmarks?

An American Insurance Company Issued $10 Million Of One-year, Zero-coupon GICs (guaranteed Investment

An American insurance company issued $10 million of one-year, zero-coupon GICs (guaranteed investment contracts) denominated in Swiss francs at a rate of 5 percent. The insurance company holds no SFr-denominated assets and has neither bought nor sold francs in the foreign exchange market. What is the insurance company’s net exposure in Swiss francs? What is the insurance company’s risk exposure to foreign exchange rate fluctuations? page 770How can the insurance company use futures to hedge the risk exposure in part (b)? How can it use options to hedge? If the strike price on SFr options is $1.0425/SFr and the spot exchange rate is $1.0210/SFr, what is the intrinsic value (on expiration) of a call option on Swiss francs? What is the intrinsic value (on expiration) of a Swiss franc put option? (Note: Swiss franc futures options traded on the Chicago Mercantile Exchange are set at SFr125,000 per contract.) If the June delivery call option premium is 0.32 cent per franc and the June delivery put option is 10.7 cents per franc, what is the dollar premium cost per contract? Assume that today’s date is April 15. Why is the call option premium lower than the put option premium?

You Have Just Started A New Job And Your Employer Has Enrolled You In

You have just started a new job and your employer has enrolled you in KiwiSaver. This is the first time you have been enrolled in KiwiSaver and you decide not to “opt out”. You are interested in estimating how much your KiwiSaver fund could be worth when you retire. You make the following assumptions: • You have just turned 30 and will retire in exactly 35 years when you are 65. • Your salary is $50,000 this year and you expect this to increase by 3% every year. • You can choose to contribute either 3% or 8% of your salary into your KiwiSaver fund each year. https://www.kiwisaver.govt.nz/already/contributions/you/amount/ • Your employer must contribute 3% of your pay into your KiwiSaver fund each year. https://www.kiwisaver.govt.nz/already/contributions/employers/ You can ignore any tax implications and assume your account receives the full 3%. (KIWI SAVER ACC) • You will be entitled to the annual member tax credit of $521.43 which will be credited into your KiwiSaver fund at the end of every year. https://www.kiwisaver.govt.nz/new/benefits/mtc/ • Your KiwiSaver fund will invest in a diversified portfolio of assets to earn a return on your investment. Of course, there is uncertainty around the actual annual rate of return that your fund will earn over the 35 years but you decide that 6% and 12% represent a good range of potential rates of return to conduct your analysis on. • Regardless of the return earned, the manager of your KiwiSaver fund will charge a management fee of 1.0% at the end of each year, based on the opening balance of your fund each year. • You will make no withdrawals or additional contributions (other than those mentioned above) to your fund until you retire in 35 years. • For simplicity, assume that all contributions to your KiwiSaver fund are made once per year, at the end of the year. The first lot of contributions will be made in one year from today. Construct a spreadsheet that will allow you to answer the following questions on Canvas. It is calculated that your expected annual salary when you are 45 years old is $77,898 How much will be in your KiwiSaver account at the start of that year if you contributed 3% of your salary and the fund earned 6%p.a.?

A Balance Sheet Analysis Of Morgan Stanley, Comparing 2007 B/S $ Values To The

A balance sheet analysis of Morgan Stanley, comparing 2007 B/S $ values to the most recently published B/S (either 2017 or 2018), including the following items: a. % change in total assets, liabilities, and equity positions over this period b. Past and current leverage position of the investment bank, and % change over this period c. Comparison of book to market value of the bank, 2007 to current value

What Is Company Co.’s Target Price Calculated Based On 2019E Revenue And 2019E Mean

What is Company Co.’s target price calculated based on 2019E revenue and 2019E mean EV/Revenue multiple?

A Digital (European) Option Is An Option Which Would Pay Nothing If The Option

A digital (European) option is an option which would pay nothing if the option is OTM upon expiration and pays a predetermined constant amount M if the underlying asset finished ITM. Graph the payoffs of a digital call option (long and short) with strike price X.

A Police Station Had To Deploy A Police Officer For An Emergency Multiple

A police station had to deploy a police officer for an emergency multiple times in the last four evenings. The table below shows the number of emergencies each evening. Weekday Number of calls each day Monday 7 Tuesday 2 Wednesday 7 Thursday 15 (Round your answer to 1 decimal place.) What would be their forecast for the emergencies on Friday using a two-day moving average approach? Forecast for Friday calls

(i) Suggest A Method To Price The Digital Call Option By Using The Usual

(i) Suggest a method to price the digital call option by using the usual notations S,X,v,T,r,q in the Black-Schole option pricing framework. (i) Price the following binary call option: S($) = 45 X($) = 50 v = 0.3 T = 0.75 year r = 0.09 pa M($) = 300

John Is A Middle Aged Executive For A Small Company. They Treat Him Well,

John is a middle aged executive for a small company. They treat him well, but, unfortunately, cannot pay what he believes he is worth. Recently, he applied to a large international corporation for an executive position. After a phone interview, which went well, the prospect employer set up an interview at their corporate offices. They then e-mailed John a series of questions which would be part of their second interview. Surprisingly, there were several questions as to what cable television news shows he regularly watches and the magazines and/or subscriptions he receives either online or through the mail. John considers himself an independent and does not belong to any one party. He, however, favors cable news shows that are considered liberal and receives an online subscription to The New Republic and New Yorker. If he admits to this information, he worries he will be “painted” as a liberal, a radical, or at least an intellectual. Although this information should NOT be important to his future job, the company would not ask these questions unless they had a reason for this information. Therefore, John decides to lie to the interviewing committee and indicate he rarely watches cable news shows and mostly watches the sports networks and the movie channel with his wife. Is John’s conduct wrong? Is it unethical to lie to obtain employment when you know the provided information will not affect your work product? After he is hired, should he “confess” he watches some cable news shows? What do you do? What are your choices?

Year Promisedcash Flows Expectedcash Flows 1 6 5 2 6 5 3 6

Year Promisedcash flows Expectedcash flows 1 6 5 2 6 5 3 6 5 4 6 5 5 6 5 6 6 5 7 6 5 8 6 5 9 6 5 10 106 95 What is the present value today of promised cash flows at 6%? If the price of the bond is 80, what is the yield to maturity of the bond using the promised cash flows? What is the present value today of the expected cash flows at 6%? What would the IRR be if the bond were purchased at 80 and the holder received the expected cash flows?

In A Diversified Mutual Fund An Investor Must Take Into Account Changes Across A

In a diversified mutual fund an investor must take into account changes across a variety of stocks. A less diversified one might offer a higher degree of performance predictability. Which type of fund (if any) has a higher degree of return predictability? Explain your answer.

A US Firm, Eggmart Corporation Is Considering Opening A Store In Uruguay. The Following

A US firm, Eggmart Corporation is considering opening a store in Uruguay. The following information applies: Uruguay is rated B and its dollar-based bonds trade at a default spread of 5% over the US treasury bond rate of 6.5%. The Uruguayan equity market has an average volatility of 0.80 while the volatility of its long-term bond market is 0.50. Eggmart has an equity beta of 0.9 and there is a debt beta in of 0.1. The tax rate for the company in the US is 35% while it is only 30% in Uruguay. The market risk premium in the US is 5.5%. Eggmart intends to borrow in Uruguay at a local rate of 20% (in pesos) and maintain a debt ratio of 40% for Uruguayan projects in line with its debt ratio of 40% in the United States. The inflation rate is 3% in the United States and 15% in Uruguay. REQUIRED: (a) Estimate the cost of equity in US dollar terms for the Uruguayan store. (b)Estimate the cost of capital (WACC) in US dollar terms for the Uruguayan store. (c)Estimate the cost of equity in Uruguayan peso terms for the Uruguayan store. Estimate the cost of capital in Uruguayan peso terms for the Uruguayan store.

Seaview Swimwear Invested $1,750 On A New Computer System For The Shop And $500

Seaview Swimwear invested $1,750 on a new computer system for the shop and $500 on staff training in order to be able to use it. They calculate that they have saved $500 in stock shrinkage and faster processing of sales has resulted in an additional $2,000 of sales. Calculate the ROI of the new computer system.

Seaview Swimwear Has Realised That It Has A Significant Number Of Customers Who Have

Seaview Swimwear has realised that it has a significant number of customers who have not paid their bills. In the financial year they have made $750,000 sales, but the debtors are $4,600. Calculate the number of debtor’s days accrued.

1. Choose Two Firms That Compete Within The Same Industry (e.g., J.C. Penney And

1. Choose two firms that compete within the same industry (e.g., J.C. Penney and Sears, Johnson

What Would B And C Excel Functions Be? Higgs Bassoon Corporation Is A Custom

What would B and C excel functions be? Higgs Bassoon Corporation is a custom manufacturer of bassoons and other wind instruments. Its current value of operations, which is also its value of debt plus equity, is estimated to be $200 million. Higgs has $110 million face value, zero coupon debt that is due in 3 years. The risk-free rate is 5%, and the standard deviation of returns for similar companies is 60%. The owners of Higgs Bassoon view their equity investment as an option and would like to know the value of their investment. a. Using the Black-Scholes Option Pricing Model, how much is the equity worth? Black-Scholes Option Pricing Model Total Value of Firm 200.00 this is the current value of operations Face Value of Debt 110.00 Risk Free rate 5% Maturity of debt (years) 3.00 Standard Dev. 60% this is sigma–also known as volatility d1 1.2392 use the formula from the text d2 0.2000 use the formula from the text N(d1) 0.8924 use the Normsdist function in the function wizard N(d2) 0.5793 Call Price = Equity Value $       123.63 million b. How much is the debt worth today? What is its yield? Debt value = Total Value – Equity Value = million Debt yield = c. How much would the equity value and the yield on the debt change if Fethe’s management were able to use risk management techniques to reduce its volatility to 45 percent? Can you explain this? Equity value at 60% volatility million Equity value at 45% volatility million Percent change million

Pick Any Financial Issue Facing Companies In The Last Few Years To Research (2013-Present)

Pick any financial issue facing companies in the last few years to research (2013-Present) and provide a brief summary. It can be on financial issues in a particular industry or for several companies.

The Dakota Heating Company Has Over The Past Few Years Paid Common Stock Dividend

The Dakota Heating Company has over the past few years paid common stock dividend of $4 in the first year, $4.20 in the second year, $4.41 in the third year, and its most recent dividend was $4.63. The company wishes to continue this dividend growth indefinitely. What is the value of the company’s stock if the required rate of return is 12 percent?

Existing Machine Was Purchased 2 Years Ago At A Cost Of $3,200. It

Existing machine was purchased 2 years ago at a cost of $3,200. It is being depreciated straight line over its 8 year life. It can be sold now for $3,000 or used for 6 more years at which time it will be sold for an estimated $500. It provides revenue of $5,000 annually and cash operating costs of $2,000 annually. A replacement machine can be purchased now for $7,800. It would be used for 6 years, and depreciated straight line. It will result in additional sales revenue of $1,500 annually, but because of its increased efficiency it would reduce cash operating costs by $600 per year. The new machine would require additional inventories of $700, and accounts receivable would increase by $300. Its expected salvage value in 6 years is $2,000. The tax rate is 40% and the required rate of return is 13%. Should the old machine be replaced? a. Calculate the incremental cash flow at time 0 (ie the initial cost of this replacement project). [5marks] b. Calculate the incremental annual operating cash flows that result from the new machine. [5marks] c. Calculate the incremental terminal cash flow. [5marks]

Bank Of America Sells A 12 Year Fixed Rate Bond At 6% And In

Bank of America sells a 12 year fixed rate bond at 6% and in turn, buys a receiver SWAPtion with 6 years remaining to expiration with 3% premium. 1. complete the chart 2. explain the net effect to BOA 3. explain the net effect to the bondholders If hand writing please write legible – thanks Year BOA pays to bond holders BOA pays to swaption OBA receives from swaption Net Cost to BOA 1 2 3 4 5 6 7 8 9 10

Require Return For Capital Funding Suppose That Smith Company Is Considering A New Project.

Require Return for Capital Funding Suppose that Smith Company is considering a new project. They are trying to determine the required rate of return for their debt and equity holders. See the information below: A 7.5% percent annual coupon bond with 20 years to maturity, selling for 104 percent of par. The bonds make semiannual payments. What is the before tax cost of debt? If the tax rate is 40%, what is the after-tax cost of debt? The firm’s beta is 1.2. The risk-free rate is 4.0% and the expected market return is 9%. What is the cost of equity using CAPM?

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