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Part A Questions: 1-Explain the effect that debt has on profit margin and return on assets (ROA)

Finance

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Part A Questions:

1-Explain the effect that debt has on profit margin and return on assets (ROA).

2- Mention 2 legal rights that shareholders have.

3-Explain how time affects the value of money.

4-Compare an ordinary annuity to a prepayment annuity.

5-List the four main bond issues.

6-Describe the relationship between risk and return.

7-Explain how the DuPont equation helps managers improve company performance.

8-Describe the purpose of the trend analysis they do in companies.

9-Explain how the return on equity (ROE) affects the use of higher debt in the company.

10-Contrast the yield to maturity (YTM) and the yield to redemption (YTC).

11-List at least 2 reasons that justify the risk measurement.

12-Explain how the Financial Asset Valuation Model (CAPM) helps determine the performance of the company's shares.

13-Describes the impact risk decisions and rates of return have on the organization.

 

Part B

Problem solutions

14-If Cell Enterprise sales in 2019 were $ 150 million and growing at 7% per year, calculate growth in 8 years (in 2027).

15-Determine the value of $ 5.00 that will grow at a rate of 6% after 20 years. Find the future value (FV) if the growth rate were 8%.

16-The Sanedrin Company has an earnings per share (EPS) of $ 4.50, a value per share of $ 45, and a market value of $ 38. Find the price / earnings (P / E) indicator.

17-Determine the present value of $ 1,200,000 that will be paid after 20 years if the discount rate were 6%.

18-Suppose a United States government bond pays $ 2,155.40 in 5 years at 6% interest. Calculate the present value of the bond.

19-If an investor intends to double $ 35,000 by investing in a bank that pays 6% interest per year, determine the time it would take to double the investment.

20-Suppose the risk-free rate is 6.4% and the market return is 8%. Calculates the expected rate of return on a stock with a volatility (beta) of 3%.

21-Palmira Industries' outstanding bonds have a face value of $ 900, a semi-annual coupon of 7%, 10 years to maturity and a YTM of 9%. Determine the price of the bond.

22-Calculates the nominal rate of return on a perpetual preferred share with a face value of $ 300, a dividend of 8% of the face value, and a current market price of $ 270.