FINANCIAL MANAGEMENT

Financial management

Financial management

Question No: 1

Wilson Wonders Bond

 

 

Years to maturity

12 years

interest rate (annually)

10%

Par value of Bond

$850

market value

$1,000

Answer:

Wilson Wonder's bond that pays 1 coupon(s) of 10% per year, that has a market value of $1,000, and that matures in 12 years will have a yield to maturity of 7.70%.

The yield is the ratio of disbursements to the deposit or investment of money and is usually given in percent annually. Since the return relates generally to an annual capital gains, they can measure the profitability will be, which refers to a company's success does not equate. The best known index is the yield rate. The term is not defined clearly, so that the classification is hardly possible in a given market. There are different types of returns, with the money or capital investment associated with the return is always a risk must be considered. It is also called return. The discount rate that equates the present value of current cash flow associated with an instrument (usually a bond) until its expiration date the price of current market of the bond. This calculation assumes that the cash flow to reinvest s can receive the same type.

Question no: 2

Required rate of return

The required rate of return (RRR) is a component in many of the metrics and calculations used in corporate finance and equity valuation. It goes beyond just identifying the return of the investment, and factors in risk as one of the key considerations to determining potential return. The required rate of return also sets the minimum return an investor should accept, given all other options available and the capital structure of the firm.

Beta

Beta represents the coefficient of correlation between a stock and the market index. In simple terms, it represents the relative movement of a stock with the market ...