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A company needed ghc 1000 to finance its activities. The firm can financed this expenditure either by bonds or equity. Interest rate on bonds is 10%. The company can earn ghc 160 in good years and ghc80 in bad years. Assuming the firm faces equal probability of good and bad years; i What will be the stream of returns on both bonds and equity if the company chooses the following financing options a 100% equity financing b 50% equity financing c 20% equity financing d 0% equity financing ii Estimate the equity risk associated with each option in (i) iii As an investor who wants to purchase a share in the company, which financing option will make you purchase the stock. Why????

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A company needed ghc 1000 to finance its activities. The firm can
financed this expenditure either by bonds or equity. Interest rate on
bonds is 10%. The company can earn ghc 160 in good years and ghc80 in
bad years. Assuming the firm faces equal probability of good and bad
years;

i What will be the stream of returns on both bonds and equity if the
company chooses the following financing options

a 100% equity financing b 50% equity financing c 20% equity financing
d 0% equity financing

ii Estimate the equity risk associated with each option in (i)

iii As an investor who wants to purchase a share in the company, which
financing option will make you purchase the stock. Why????

Mehnaz, Inc., just constructed a manufacturing plant in Dhaka, Bangladesh. The construction cost is Tk. 1,000,000. Mehnaz intends to operate the plant for three years. During the three years of operation, cash flows are expected to be 400,000 Tk., 400,000 Tk., and 400,000 Tk., respectively. Operating cash flows will begin one year from today and all cash flows are remitted back to the parent at the end of each year as the government of BD will allow to remit fund during the term of project. Withholding tax imposed by BD government is 15% on remitted amount. At the end of the third year, Mehnaz expects to sell the plant for 300,000 Tk. Mehnaz has a required rate of return of 15 percent. It currently takes 90 Tk. to buy 1 U.S. dollar, and the Tk. is expected to depreciate by 5 Tk. at the end of first year.

/in /by

Mehnaz, Inc., just constructed a manufacturing plant in Dhaka,
Bangladesh. The construction cost

is Tk. 1,000,000. Mehnaz intends to operate the plant for three years.
During the three years of

operation, cash flows are expected to be 400,000 Tk., 400,000 Tk., and
400,000 Tk., respectively.

Operating cash flows will begin one year from today and all cash flows
are remitted back to the parent

at the end of each year as the government of BD will allow to remit
fund during the term of project.

Withholding tax imposed by BD government is 15% on remitted amount. At
the end of the third year,

Mehnaz expects to sell the plant for 300,000 Tk. Mehnaz has a required
rate of return of 15 percent.

It currently takes 90 Tk. to buy 1 U.S. dollar, and the Tk. is
expected to depreciate by 5 Tk. at the end

of first year.

bandile want to start cycling and she wants to know the slope of the route she planning to take. if her location is indicated on a coordinate system of axis , her starting point is at (2:3) and the finishing point is at (8:6) determine the the slope when straight line is drawn between these points state whether the line has descending or ascending trend from left to right on the co-ordinates system of axis

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bandile want to start cycling and she wants to know the slope of the
route she planning to take. if her location is indicated on a
coordinate system of axis , her starting point is at (2:3) and the
finishing point is at (8:6) determine the the slope when straight line
is drawn between these points state whether the line has descending or
ascending trend from left to right on the co-ordinates system of axis

An investment of $15,000 is made for three years at 4.5% compounded quarterly. a) Determine the maturity value of the investment. b) What is the amount of compound interest earned on the investment?

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An investment of $15,000 is made for three years at 4.5%

compounded quarterly.

a)

Determine the maturity value of the investment.

b)

What is the amount of compound interest earned on the

investment?

Given the following data on output and inputs for ten production period Production period Output (Q) Capital (K) Labour (L) 1 225 10 20 2 240 12 22 3 278 10 26 4 212 14 18 5 199 12 16 6 297 16 24 7 242 16 20 8 155 10 14 9 215 8 20 10 160 8 14 1. Estimate the parameters (A, α and β) of a Cobb-Douglas production function using the least squares regression method. 2. Use estimated parameters to determine (a) returns to scale and (b) factor intensity 3. Determine elasticity of labour and elasticity of capital 4. Measure marginal product of labour and capital for the input combination (L=20 and k=30) 5. Construct the equation for isoquant and graph the isoquant assuming output is 100 units and L = 2,4,6,8,10,12,14.16 and 18

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Given the following data on output and inputs for ten production
period

Production period Output (Q) Capital (K) Labour (L)

1 225 10 20

2 240 12 22

3 278 10 26

4 212 14 18

5 199 12 16

6 297 16 24

7 242 16 20

8 155 10 14

9 215 8 20

10 160 8 14

1. Estimate the parameters (A, α and β) of a Cobb-Douglas production
function using the least squares regression method.

2. Use estimated parameters to determine (a) returns to scale and (b)
factor intensity

3. Determine elasticity of labour and elasticity of capital

4. Measure marginal product of labour and capital for the input
combination (L=20 and k=30)

5. Construct the equation for isoquant and graph the isoquant assuming
output is 100 units and L = 2,4,6,8,10,12,14.16 and 18

Mr and Mrs Motshabane bought a franchise for R1 000 000,00. They took a mortgage loan at 10,7% interest per year, compounded monthly, for a term of 20 years. What is the principal repaid during the fourth month

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Mr and Mrs Motshabane bought a franchise for R1 000 000,00. They took a mortgage loan at 10,7% interest per year, compounded monthly, for a term of 20 years. What is the principal repaid during the fourth month

If the NPV (net present value) of a shop is R195 000 and the profitability index is 1,2437, the initial investment is the is?

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If the NPV (net present value) of a shop is R195 000 and the
profitability index is 1,2437, the initial investment is the is?

Caleb sold a put option on Canadian dollars for $.05 per unit. The strike price was $.85, and the spot rate at the time the option was exercised was $.92. Assume Caleb immediately sold off the Canadian dollars received when the option was exercised. Also assume that there are 50,000 units in a Canadian dollar option. What was Caleb’s net profit on the put option?

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Caleb sold a put option on Canadian dollars for $.05 per unit. The
strike price was $.85,

and the spot rate at the time the option was exercised was $.92.
Assume Caleb

immediately sold off the Canadian dollars received when the option was
exercised. Also

assume that there are 50,000 units in a Canadian dollar option. What
was Caleb’s net

profit on the put option?

Emmanuella purchased a put option on British pounds for $.06 per unit. The strike price was $1.85, and the spot rate at the time the pound option was exercised was $1.69. Assume there are 31,250 units in a British pound option. What was Emmanuella’s net profit on the option?

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Emmanuella purchased a put option on British pounds for $.06 per
unit. The strike price

was $1.85, and the spot rate at the time the pound option was
exercised was $1.69.

Assume there are 31,250 units in a British pound option. What was
Emmanuella’s net

profit on the option?

ABC Company Ltd purchased 5000 cocoa futures contract at a price of $150 per contract. As part of the contract, ABC was required to deposit $10 per contract initially in their account with the maintenance margin set at $5 per contract. If the price per contract falls to $142 overnight, what action will the exchange require ABC to undertake?

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ABC Company Ltd purchased 5000 cocoa futures contract at a price
of $150

per contract. As part of the contract, ABC was required to deposit $10
per

contract initially in their account with the maintenance margin set at
$5 per

contract. If the price per contract falls to $142 overnight, what
action will the

exchange require ABC to undertake?