Task 1: Assessing loan options for AirJet Best Parts, Inc. 1.) EAR = Frequency of compounding and the Annual Percentage Rates EAR = ( 1+ A/ N) N – 1
A = Stated annual interest rate.
N = number of compounding periods
National First (EAR) =
Prime loan rate of 3.25%
EAR = (1 + (6.75+3.25)/2)2 – 1 = 10.25% compounded semi-annually. Regions Best (EAR) = (1 + 13.17/12)12 – 1 = 14% compounded monthly.

2.) National First Bank would be the best choice. The reason being is that they provide a lower interest rate, which is determined from the solution above.

3.) EAR = ( 1 + 8.6/12)12 - 1 = 8.95% compounded monthly.
Monthly payment = 8.95% of $69,50,000 = $622025
PVA = C({1 – [1/(1 + r)]t } / r)
$6,950,000 = $C[1 – {1 / [1 + (.086/12)]60} / (.086/12)]
Solving for the payment, we get:
C = $6,950,00 / 48.62687
C = $142,925

3.) Price of preferred stock = 1.50 / 0.0918 = $16.34. The current stock has a higher price than preferred stock.

4.) If the dividends increase, then the price of the stock is going to go up. If the rate of return increases, it is going to push down the current price of the stock. If there is a positive change in dividend, then the stock price will increase. If there is a negative change then the stock price will decrease.

Task 3: Bond Evaluation
1.) YTM = 6.92%
2.) Coupon rate is the fixed rate of income, which the bond provides in for the purchase of the bond. YTM rate would be the rate of return the investor would earn. It’s also the annual interest rate, which exists in the market to compare whether the coupon rate, which is being given, is overvalued...

...Ch 10: 3, 4, 5, 7; Ch 14: 4
3. Jersey mining earns $9.50 a share, sells for $90, and pays a $6 per share dividend?
The stock is split two for one and a $3 per share cash dividend is declared.
(a) What will be the new price of the stock?
New Price: $90/2 = $45
(b) If the firm total earning do not change, what is the payout ratio before and after the stock split?
Before: $6/9.50 = 63.16%
After: $3/4.75 = 63.16%
4. Firm A had the following selected items on its balance sheet:
Cash: 28,000,000
Common Stock: 100,000,000
($50 par, 2,000,000 shares outstanding)
Additional Paid Capital: 10,000,000
Retained Earnings: 62,000,000
How would each of these accounts appear after:
A. A cash dividend of $1 per share
2,000,000 *$1 = $2,000,000
Cash: 26,000,000
Common Stock: 100,000,000
($50 par, 2,000,000 shares outstanding)
Additional Paid Capital: 10,000,000
Retained Earnings: 60,000,000
B. a 5% stock dividend (fair market value is $100/share)
$2,000,000 *5%* $100 = 10,000,000
$2,000,000 *5% *$50 = 5,000,000
Cash: 28,000,000
Common Stock: 105,000,000
($50 par, 2,000,000 shares outstanding)
Additional Paid Capital: 15,000,000
Retained Earnings: 52,000,000
C. A one-for-two reverse split?
$50*2 = $100
2,000,000/2 = 1,000,000
Common Stock: 100,000,000
($100 par, 1,000,000 shares outstanding)
Additional Paid Capital: 10,000,000
Retained Earnings: 62,000,000
5. Jackson Enterprises has the following capital (equity...

...Week3 Individual Assignments
ACC/400
Chapter 10
1. Georgia Lazenby believes a current liability is a debt that can be expected to be paid in one year. Is Georgia correct? Explain.
Yes Georgia is correct because a current liability is a short-term liability that is to be paid within the accounting cycle which is one year or less.
7. (a) What are long-term liabilities? Give two examples
Long term liabilities are company obligations that extend beyond the current year, or alternately, beyond the current operating cycle. Examples are debentures and loans.
(b) What is a bond? – It is a form of interest-bearing note payable issued by corporations, universities, and governmental agencies.
8. (a) Secured and unsecured bonds - A secured bond is backed by collateral and an unsecured bond is not backed with collateral. Collateral is represented with assets that are surrendered if the bond is not repaid.
(b) Convertible and callable bonds - A convertible bond can be converted into stock by an investor and a callable bond is one that can be bought back by the company from the investor before the bond reaches maturity.
19. Valentin Zukovsky says that liquidity and solvency are the same thing. Is he correct? If not, how do they differ?
Valentin is wrong. Liquidity is a measure of how easily business assets can be converted to cash and solvency is the amount of...

...that were present at that time suggests that a significant number of borrowers would have defaulted on their loans. A weakening currency and slowed economic growth would then cause these illiquid assets to fall in value and be difficult to convert into liquid funds.
In April 1997, Thai authorities suspended trading in finance company shares on the Bangkok stock exchange. This brought attention to the weakness in the economy that had been disguised by large growth and investments. Fearing that if financial institutions losing their credibility would do more harm to their currency, the Thai authorities chose to devalue the Thai baht instead. By November the same year, South East Asian currencies dropped by over fifty percent below their pegged levels. However, it was unlikely that a financial crisis could have been avoided either way as the revaluation depreciated the currency on bank balance sheets. The events in Thailand triggered panic and speculation in the region, affecting the Malaysian ringgit and the Philippine peso shortly after. The ringgit depreciated against the dollar by nearly fifty percent in the middle of May 1997. Weeks later, the composite index of the Kuala Lumpur Stock Exchange fell by 44.9 percent (Ariff 1999). In the Philippines, the peso fell twelve percent to the dollar when news spread that the country will loosen controls on the peso (Holley 1997). The Singapore dollar also suffered a decline of 18.3 percent...

...
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Programme: HND BUSINESS/ HOSPITALITY
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Wherever published, unpublished, printed, electronic or other information sources have been used as a contribution or component of this work, these are explicitly, clearly and individually acknowledged by appropriate use of quota-tion marks, citations, references and statements in the text.
I understand that penalties will be incurred for late submission of work
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Have you submitted any Mitigating Circumstances Application? Yes/No (Please delete appropriately)
Date of...

...FIN 370 Lab Study Guide - All Weeks - Additional Formula
(Compound interest) to what amount will the following investments accumulate?
a. $5,000 invested for 10 years at 10 percent compounded annually
5000 x (1.10)^10 = 5000 x2.5937 =12968.5
b. $8,000 invested for 7 years at 8 percent compounded annually
8000 x (1.08)^7 = 8000 x 1.7138 = 13710.59
c. $775 invested for 12 years at 12 percent compounded annually
775 x (1.12)^12 = 775 x3.8959 =3019.38
d. $21,000 invested for 5 years at 5 percent compounded annually
21000 x (1.05)^5 =21000x 1.2762 =26801.91
(Compound value solving for n) How many years will the following take?
a. $500 to grow to $1,039.50 if invested at 5 percent compounded annually
500/1039.5 =.481
Lookup .48 under 5% in pv of $1 table = 15 years
b. $35 to grow to $53.87 if invested at 9 percent compounded annually
35/53.87 =.649
Lookup .649 under 9% in pv of $1 table = 5 years
c. $100 to grow to $298.60 if invested at 20 percent compounded annually
100/298.6 =.3348
Lookup .3348 under 20% in pv of $1 table = 6 years
d. $53 to grow to $78.76 if invested at 2 percent compounded annually
53/78.76 =.6729
Lookup .6729 under 2% in pv of $1 table = 20 years
(Present value) what is the present value of the following future amounts?
a. $800 to be received 10 years from now discounted back to the present at 10 percent
800/(1.10)^10 = 308.43
b. $300 to be received 5 years from now discounted back to the present at 5 percent...

...Week3 Individual AssignmentsFinance for Decision Making
FIN/419
January 30, 2012
Chapter 4: Problem 4-23 – Personal Finance Problem
Funding your retirement - You plan to retire in exactly 20 years. Your goal is to create a fund that will allow you to receive $20,000 at the end of each year for the 30 years between retirement and death (a psychic told you would die exactly 30 years after you retire). You know that you will be able to earn 11% per year during the 30-year retirement period.
a. How large a fund will you need when you retire in 20 years to provide the 30-year, $20,000 retirement annuity?
$173,880 will be required to retire in 20 years to provide the 30-year, $20,000 retirement annuity. Calculated as follows:
According to Gitman (2009), present value (annuity): = (, )
PVA = PMT x (PVIFA11%, 30)
PVA = $20,000 x (8.694)
PVA = $173,880
b. How much will you need today as a single amount to provide the fund calculated in part “a” if you earn only 9% per year during the 20 years preceding retirement?
$30,950.64 would be needed today to provide $173,880 assuming only 9% is earned per year during the 20 years preceding retirement.
According to Gitman (2009), present value (single amount): = (, )
PV = FV x (PVIF9%,20)
PV = $173,880 x (0.178)
c. What effect would an increase in the rate you...

...FIN/419 - Week3 Individual Assignment form the readings
P4–23 (LG-2/LG-3) Funding your retirement you plan to retire in exactly 20 years. Your goal is to create a fund that will allow you to receive $20,000 at the end of each year for the 30 years between retirement and death (a psychic told you would die exactly 30 years after you retire). You know that you will be able to earn 11% per year during the 30-year retirement period.
a. How large a fund will you need when you retire in 20 years to provide the 30-year, $20,000 retirement annuity?
n= 30 r= 11.00% PVIFA= 30 periods, 11% Rate = 8.693793
Annuity= 20,000 / Present value = $173,876 = 20000 X 8.693793
Answer= $ 173,876 Retirement money required
b. How much will you need today as a single amount to provide the fund calculated in part A if you earn only 9% per year during the 20 years preceding retirement?
n= 20 r= 9.00% FVIF= 20 periods, 9% = 5.604411
Amount required in 20 years = $ 173,876
Amount to be invested = $ 31,025
c. What effect would an increase in the rate you can earn both during and prior to retirement have on the values found in parts A and B? Explain.
If the interest in Part A went from .11 to .20 then we would need only $99,578.73.
In Part B it was .09 went to .15 including the interest from Part A was at .11 you would need $10,623.86
This is because higher compounding interest rates will provide more money, therefore you...

...Introduction
In this report, I will analyze the financial performance of SDB by comparing it with its industry peers. SDB’s asset quality, earnings capability and capital adequacy are the three aspects I will pay attention to when evaluate its financial performance. Then I will discuss whether it is appropriate for Newbridge to pay 1.6 times book value for 18% shares in SDB. And what is appropriate range for the price Newbridge can offer. The objective of this report it to assist Newbridge to make right decisions on whether to invest SDB or not and if invest what is appropriate price to pay for each share.
Part 1 SDB’ financial performance
In order to analyze the financial performance of SDB, there are three aspects we should consider. And they are asset quality, earnings capability and capital adequacy of SDB. I will exam its asset quality first.
Asset quality
First of all, the asset quality of SDB seems in a big problem. There are two important asset quality measures that managers and analysts should pay attention to, they are NPL ratio (NPL/Gross loan) and NPL coverage ratio (LLR/NPL). Here, NPL means nonperforming loan, it is a sum of borrowed money upon which the debtor has not made his or her scheduled payments for at least 90 days. Based on the data from Exhibit 10 (Jin, Xuan, & Bai, 2009), NPL ratio for SDB is 11.6% in 2002 and the average NPL ratio is 7.3% for other joint-stock banks in china. Higher NPL ratio indicates SDB got a worse...