Time Value of Money (25 Points)
Question # 00465767
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Updated on: 01/18/2017 02:21 PM Due on: 01/20/2017
Question #1 – Time Value of Money (25 Points)
Please give an example from your own personal or professional experiences (life/career) that involves the Time Value of Money.
The Time Value of Money defined as in Chapter 4 as: Present Value, Future Value, Present Value of an Annuity, Future Value of an Annuity, Amortization.
It can be one of these above or multiple.
Explain the example and how this/these money valuation tools fit into your example.
Please be thorough and specific.
Question #2 – Debt Valuation (25 Points)
Part I - What might cause investors to rationally stay away from long-term bonds even when the yield curve is upward-sloping?
Part II - Explain why bond prices fluctuate in response to changing interest rates. What adverse effect might occur if bond prices remain fixed prior to their maturity?
Question #3 – Stock Valuation & Risk (25 Points)
Part I - Explain why the market value of common stock often differs from its liquidation value or its book value.
Please give an example from your own personal or professional experiences (life/career) that involves the Time Value of Money.
The Time Value of Money defined as in Chapter 4 as: Present Value, Future Value, Present Value of an Annuity, Future Value of an Annuity, Amortization.
It can be one of these above or multiple.
Explain the example and how this/these money valuation tools fit into your example.
Please be thorough and specific.
Question #2 – Debt Valuation (25 Points)
Part I - What might cause investors to rationally stay away from long-term bonds even when the yield curve is upward-sloping?
Part II - Explain why bond prices fluctuate in response to changing interest rates. What adverse effect might occur if bond prices remain fixed prior to their maturity?
Question #3 – Stock Valuation & Risk (25 Points)
Part I - Explain why the market value of common stock often differs from its liquidation value or its book value.
Part II – Explain the Capital Asset Pricing Model in terms of a CFO managing his/her investor relations.
Question #4 – Risk Evaluation (25 Points)
Select a company from the Dow Jones Industrials Index and prepare a risk analysis.
You risk analysis should include minimally below:
• Credit rating
• Beta value
• CAPM required return on equity investment
Select a company from the Dow Jones Industrials Index and prepare a risk analysis.
You risk analysis should include minimally below:
• Credit rating
• Beta value
• CAPM required return on equity investment
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Rating:
/5
Solution: assignment assistance