Fin 300 - Study guides, Class notes & Summaries

This is a comprehensive and detailed study guide on Exam 1 for Fin 300. Quality stuff!! U'll need it!!

FIN 300 Bob Katz is interested in the following stock: - current dividend is $2.50 - proje FIN 300 Bob Katz is interested in the following stock: - current dividend is $2.50 - projected three year growth rate of 10% - growth rate after year 3 is expected to fall and remain constant at 6% - Bob's required return is 12% Step 1: Present value of Dividends t Do FVIF Dt PVIF PVdiv 1 Step 2: Future value of stock price Step 3: Present value of future stock price Step 4: Present value of stock Solvi...

FIN 300 Builtrite™s common stock is currently selling for $78 a share and the firm just pa FIN 300 Builtrite™s common stock is currently selling for $78 a share and the firm just paid an annual dividend of $2.40 per share.  Management believes that dividends and earnings should grow at 9% annually.  Since new stock would need to be sold to finance an expansion, Builtrite expects flotation costs to be 5% of the expected selling price of $78 a share. Based on this, and a marginal tax rate o...

FIN 300 A City of Tempe muni bond has a yield of 3.4%. What is the tax equivalentyield for FIN 300 A City of Tempe muni bond has a yield of 3.4%. What is the tax equivalentyield for an investor in the 25% tax bracket compared to an investor in the35% tax bracket?2. What would you be willing to pay for a $1000 par, 6% coupon bond with 15years until maturity if you wanted to earn a return of 7%? What if you onlyneeded to earn a return of 5%? What if you wanted to earn 6%?3. If you purchase a $100...

FIN 300 Beginning in 10 years, (end of years 10 to 12) you will receive 3 annual installme FIN 300 Beginning in 10 years, (end of years 10 to 12) you will receive 3 annual installments of $80,000 each. If interest rates are 8%, what are these benefits worth to you today? O $103,135 ? O $90,243 O $64,460 O $77,351 Jay Aquire has started on his first job. He plans to start saving for retirement early. He will invest $5,000 at the end of each year for the next 45 years in a fund that will earn a ...

FIN 300 Antie Lope has been saving $6000 annually for the past 28 years in an investment a FIN 300 Antie Lope has been saving $6000 annually for the past 28 years in an investment accountwhich has been earning 9% annually. She is planning on retiring now. She is a little afraidthat she might outlive her retirement savings, so she is planning to "live forever" by setting upa perpetual annuity. During her retirement Antie plans on investing in safer investments soher expected return is going to...