FINC400 full course (American Public university)
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name-finc400-7.xlsxInstructions
| Name: | |||||||||||||||||||
| Save your work as 'lastnamefirstinitial-FINC400-7 | |||||||||||||||||||
| Example: FinanceA-FINC400-7 | |||||||||||||||||||
| FINC 400 Principles of Financial Management | |||||||||||||||||||
| Week 7 Homework Problems | |||||||||||||||||||
| Complete the following problems: | |||||||||||||||||||
| Problem 16-5 | Problem 17-7 | ||||||||||||||||||
| Problem 16-7 | Problem17-13 | ||||||||||||||||||
| Problem 16-11 | Problem 17-16 | ||||||||||||||||||
| Master 11/2011-kT |
16-5
| Problem 16-5 - Refer to problems at the end of the chapter for details and instructions: | ||||
| Use the template to complete the problem : | ||||
| Security Provision | Yield to Maturity | |||
| a. | Debenture | 7.79% | ||
| b. | Secured debt | 9.17% | ||
| c. | Subordinated debenture | 8.67% | ||
| Solution: | ||||
| Security Provision | Yield to Maturity | |||
| a. | Debenture | |||
| b. | Secured debt | |||
| c. | Subordinated debenture | |||
16-7
| Problem 16-7 - Refer to problems at the end of the chapter for details and instructions: | ||||
| Use the template to complete the problem : | ||||
| Cox Media Corporation | Solution: | |||
| Annual Interest | 11% | a) | Present Value of Interest Payments | |
| Par Value | $1,000 | PVA = A × PVIFA | ||
| Yield to Maturity | 8% | A = | ||
| Maturity (years) | 20 | PVIFA = | ||
| PVA = | ||||
| Assumption of Semiannual Interest Pay | ||||
| Semiannual Interest | 5.50% | Present Value of Principal Payment at Maturity | ||
| Semiannual Y' to Maturity | 4.00% | PV = FV × PVIF | ||
| Maturity (semiannual) | 40 | FV = | ||
| PVIF = | ||||
| PV = | ||||
| TOTAL PRESENT VALUE: | ||||
| Present Value of Interest Payments | ||||
| Present Value of Principal Pay. at Maturity | ||||
| Total Present Value of Price of the Bond | ||||
| b) | ||||
16-11
| Problem 16-11 - Refer to problems at the end of the chapter for details and instructions: | |||||
| Use the template to complete the problem : | |||||
| Information: | Solution: | ||||
| Par Value | $1,000 | a) | Present Value of Principal Payment at Maturity | ||
| Yield to Maturity (a) | 11% | PV = FV × PVIF | |||
| Maturity (years) | 20 | FV = | |||
| Yield to Maturity (b) | 9% | PVIF = | |||
| Yield to Maturity (c) | 13% | PV = | |||
| b) | Present Value of Principal Payment at Maturity | ||||
| PV = FV × PVIF | |||||
| FV = | |||||
| PVIF = | |||||
| PV = | |||||
| c) | Present Value of Principal Payment at Maturity | ||||
| PV = FV × PVIF | |||||
| FV = | |||||
| PVIF = | |||||
| PV = | |||||
17-7
| Problem 7-17 - Refer to problems at the end of the chapter for details and instructions: | ||||||||
| Use the template to complete the problem : | ||||||||
| Hansen Fabrics Company | Solution: | |||||||
| Shares owned by Betsy | 918 | Votes = Number of shares × number of directors to be elected | ||||||
| # of directors to be elected | 13 | |||||||
| # of shares outstanding | 31,000 | a) | x | = | votes | |||
| b) | x | = | votes | |||||
| c) | / | = | ||||||
17-13
| Problem 17-13 - Refer to problems at the end of the chapter for details and instructions: | |||||
| Use the template to complete the problem : | |||||
| Prime Bankcorp | Solution: | Show your work! | |||
| Subscription price = S | $50 | a) | R= | ||
| # of rights = N | 5 | ||||
| Selling Price = Mo | $59 | b) | New Stock Price = | ||
17-16
| Problem 17-16 - Refer to problems at the end of the chapter for details and instructions: | |||||
| Use the template to complete the problem : | |||||
| Magic Tricks Corp. (The Andersons) | Solution: | ||||
| # of shares owned | 5 | a) | R = | ||
| Market value of stock | $60 | ||||
| Cash holdings | $48 | b) | Portfolio Value | ||
| Purchase price - new share | $48 | Stock | |||
| Cash | |||||
| Total portfolio value | |||||
| c) | Diluted value = | ||||
| Portfolio Value | |||||
| Stock | |||||
| Cash | |||||
| Total portfolio value | |||||
| d) | Portfolio Value | ||||
| Stock | |||||
| Proceeds from sale of 5 rights | |||||
| Cash | |||||
| Total portfolio value | |||||
