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- 1. Consider a wine dealer who has k bottles of wine. The dealer can sell them now (t = 0) or can store it for some time and then sell them later. The value of k bottles at t-th month is given by: Vt = ket The dealer can use the sales revenue as principal in a risk-free investment at rate r. (b) Write out the present value PV, of k bottles at t-th month.12:42 Expert Q&A Done e bond wi e wth S en and dd 1 y Howuh wod an be wilngt pay r ths bonda5 pr yr y d con te e the intrt and annly to d compunding when p yea The urnt worh ofhend oundt the ) Azero coupon bond will be worth $15,000 when it matures and is redeemed after 13 years. How much would an investor be willing to pay now for this bond if a 3% per year yield is desired? Click the icon to view the Interest and annuity table for discrete compounding when = 3% per year. The current worth of the bond is (Round to the nearest dollar)A stock had returns of 14 percent, 17 percent, 14 percent, 20 percent, 16 percent, and 2 percent over the last six years. What is the arithmetic return for the stock? Arithmetic return What is the geometric return for the stock? Geometric return
- bond valuation An investor has two nonds in her portfolio, bond C and bond Z. each bond maturres in 4 years has a face value of 1000, and has a yield to maturity of 9.6% bond C pays a 10% annual coupon, while bond Z is a zeo coupon bond . b- assuming that the yield to maturity of each bond remains at9.6% over the next 4 years, calculate the price of the bonds at each of the following years to maturity year 4,3,2,1,0 b- plot the time path of price for each bondSuppose that you invest $3,000 in stock. Fiveyears later, your investment yields $8,568. What isthe rate of return of your investment?The current price of a stock is $64.45. If dividends are expected to be $0.80 per share for the next five years, and the required return is 8%, then what should the price of the stock be in 5 years when you plan to sell it? The price 5 years from now will be $____
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- A firm is considering purchasing equipment to manufacture a new product. The equipment will cost $3M, and expected net cash inflowsare $0.35M indefinitely. If market demand for theproduct is low, then over the next five years thefirm will have the option of discarding the equipment on a secondary market for $2.2M. Assume thatMARR = 12%, s = 50%, and r = 6%. What isthe value of this investment opportunity for the firm?Which of the following statements is true about current and capital and financial acocunts? O A. Their sum equals zero B. Their sum is always negative C. Their sum is always positive D. They are unrelatedThe average house price is Php $12,770,797. Suppose that Nike are trying to buy a house which is equal to $12,770,79 and he have $10,000 today that can be invested at his bank. The bank pays 10% percent annual interest on its accounts. How long will it be before he have enough to buy the house?