O Bond Ratings and Flotations Costs. Why do non investment-grade bond shave much higher direct costs than investment-grade issues?

1. Capital budgeting. Calculate initial investment, appropriate cash flows, and use the net present value criteria to evaluate the following investment opportunity: a. Initial investment: b. Intermediate cash flows (or their PV) C. Net present value: d. Accept/reject? Why?

The current price of the Exchange Traded Fund YHT, which does not pay dividends, is $11.75 per share. Your position, worth 9400 dollars,consists entirely of YHT shares. The effective 3-month interest rate is 0.75% and futures contracts on YHT with 3-month maturity are trading at fair value. To protect your position against potential losses, you decide to partially hedge by selling 720 YHT futures that expire in 3 months. You have built a proprietary model according to which the 3-month net return on YHT will be between -22% and 23%. What is the lowest possible value of your combined position in 3 months based on your model?

Stock YMH is trading at $11.5 per share and is scheduled to pay a$0.115 dividend per share in six months. The effective 6-month interest rate is 1.5% and the YMH forward contract with 6-month maturity is-trading at $12.14 (the forward contract expires right after the dividend is paid). If you have $4600 now, but cannot borrow, what is the maximum riskless profit you can generate in six months (i.e., at maturity)?

FIN 352 INVESTMENTS Written Assignment #3 Descriptions: In the exercise, students will perform stock valuation using the price relative approach and learn how to use stock screening tools to build a peer group to assist in the valuation analysis.

Debt versus Equity Flotation Costs. Why are the costs of selling equity so much larger than the costs of selling debt?