#### Acme Stock Options Problem

Acme stock is trading at \$120 per share, and the company will not pay any dividends over the next year. Consider an Acme European call option and a European put option, both having an exercise price of \$124 and both maturing in exactly one year. The simple (annualized) interest rate for borrowing an...

#### Shares of Novotel: Options example

Shares of Novotel will sell for either \$150 or \$80 three months later, with probabilities 0.60 and 0.40, respectively. A European call with an exercise price of \$100 sells for \$25 today, and an identical put sells for \$8. Both options mature in three months. What is a price of a three-month zero-cou...

#### Applying Financial Analysis Tools

How to analyze a company financial performance, using the following tools: Profitability Analysis Profit Margin Analysis Asset Turnover Fixed Asset Turnover Rate of Return on Common Shareholders' Equity Earning Per Common Share

#### Forward and Futures

During the summer you had to spend some time with your uncle, who is a wheat farmer. Your uncle, knowing you are studying for an MBA at Harvard, asked your help. He is afraid that the price of wheat will fall, which will have a severe impact on his profits. Thus he asks you to compute the 1yr forwar...

#### Financial Project: Quantitative Reasoning

As an Ivy Tech student, you are making an investment in your education. This project will look at how that investment will pay off if you graduate and get a job in your desired field. The median annual income for a high school graduate is \$25,000. This is the value that you will be comparing you...

#### Credit Card Calculations

1. Create an Excel spreadsheet that can do the calculations for the credit card below. Using formulas and the drag function of Excel (see the notes), find the values for 1 year of charges. With a beginning balance of \$1950 and no additional charges, you will just pay the minimum payment each mon...

#### Finance: Cost of capital calculations

1) You are an analyst in a major investment bank and have been assigned the task of determining the share price of Foodmart, a national supermarket chain. The stock beta is 1.286, Rf=3%, Rm=10%. The cost of debt is 6.82%. The tax rate is 34% and the firm is 40% debt financed. Calculate the WACC for...

#### Amortization Schedule Computations

John Gunho wants to purchase a condominium, he will be taking out a mortgage for the condo. The purchase price for the condo is \$42,000 at an annual rate of 7.2%. He reviewed his options for the term, and he knows the effects of compounding interest, so he plans to take a one year term mortgage. (...

#### TVM, Share Price, CAPM Questions

1) What is the holding period return (percentage return on this investment) to an investor who bought 100 shares of Charter Oil nine months ago for \$36 a share, received two \$50 dividend checks, and sold the stock today at \$38 a share? 2) What is the market price of a share of stock for a firm th...

#### Stocks and Averages in Excel

Hi I'm having some issues with the numbers below. I'm using Excel to complete all problems 1-15 however I only need help on the ones below. 1. You buy a stock for \$20. After a year the price rises to \$25 but falls back to \$20 at the end of the second year. What was the average percentage return ...

#### Steel mill production planning

A steel mill produces two types of steel alloy: boral and chromal. Production of each alloy requires three processes: Box anneal, Cold Roll, and Strand anneal. Production capacities are: Box anneal: 4,000 hours/month Cold Roll: 500 hours/month Strand anneal: 1,000 hours/month Production rates in...

#### Simulation-Dice Rolls in Excel

Develop two simulation models of tossing two six-sided dice (numbered 1 through 6 on the six faces). Model 1: Simulate rolling a single die twice and add the total. Model 2: Simulate a combined roll of two dice, giving a number from 2 through 12 with appropriate probabilities.

#### Personal Budget Deficit

A. What situations might have created the budget deficit for the Constantine family? B. What amounts would you suggest for the various categories for the family budget? C. Describe additional actions for the Constantine family related to their budget or other money management activities. Adjust...

#### Career and Financial Planning

Career Decision: Life Situation Single - Age 21 No dependents College student Financial Data Monthly Income \$1,750 Living Expenses \$1,210 Personal property \$7,300 Savings \$2,000 Student loan \$3,000 Credit card debt \$2,400 Shelby Johnson's current employment position, a grooming speci...

#### Financial Planning: Personal

Situation 1: Fran and Ed Blake, ages 43 and 47, have a daughter who is completing her first year of college and a son three years younger. Currently, they have \$42,000 in savings and investment funds set aside for their children's education. With increasing education costs, they are concerned wheth...

#### Capital Vs. Revenue Expenditure

Explain the difference between a capital expenditure and a revenue expenditure. Also, give an example of each and explain the difference in the method of accounting for each expenditure. Explain if there are times that it would be in management's best interest to "shift" an expenditure from a capita...

#### Ethics of Minimum Wage

What are the ethical implications of federal minimum wage? Who does it help, and who does it harm? Does raising the current level of the minimum wage increase unemployment, drive business away, or harm the very poor? Will a higher minimum wage raise the standard of living and buying power of the wag...