Tag: Finance

Q.1. In a report dated December 15, 2004, the Office of Economic Analysis of the U.S. Securities and Exchange Commission (SEC) compared trade execution quality on the NYSE and NASDAQ using a matched sample of 113 pairs of firms. The comparison is based on six months of data from January to June 2004. The results regarding which market has the better execution quality (NYSE or NASDAQ) vary across order size, firm size, and order type. The results below are for small market orders (100–499 shares) in shares of large market capitalization firms.
Spread (cents)
NASDAQ
NYSE
Quoted spread
2.737
2.791
Effective spread
2.650
2.490
On the basis of the above results, address the following:
Determine whether dealers in NASDAQ shares and dealers (‘‘specialists’’) in NYSE shares in the particular market being discussed provided price improvements.
B. Contrast the relative performance of dealers in the two markets with regard to any price improvements.
Q.2. Consider some stocks that trade in two markets, with a trader being able to trade in these stocks in either market. Suppose that the two markets are identical in all respects except that bid–ask spreads are lower and depths (the number of shares being offered at the bid and ask prices) are greater in one of the two markets. State in which market liquidity-motivated and information-motivated traders would prefer to transact. Justify your answer.
Q.3. Evaluate the most likely effects of the following events on the investor’s investment objectives, constraints, and financial plan.
A childless working married couple in their late 20s adopts an infant for whom they hope to provide a college education.
An individual decides to buy a house in one year. He estimates that he will need $102,000 at that time for the down payment and closing costs on the house. The portfolio from which those costs will be paid has a current value of $100,000 and no additions to it are anticipated.
A foundation with a €150,000,000 portfolio invested 60 percent in equities, 25 percent in long-term bonds, and 15 percent in absolute return strategies has approved a grant totaling €15,000,000 for the construction of a radio telescope observatory. The foundation anticipates a new contribution from a director in the amount of €1,000,000 toward the funding of the grant.
Q.4. Duane Rogers, as chief investment officer (CIO) for the Summit PLC defined-benefit pension scheme, has developed an economic forecast for presentation to the plan’s board of trustees. Rogers projects that U.K. inflation will be substantially higher over the next three years than the board’s current forecast.
Rogers recommends that the board immediately take the following actions based on his forecast:
Revise the pension scheme’s investment policy statement to account for a change in the U.K. inflation forecast.
Reallocate pension assets from domestic (U.K.) to international equities because he also expects inflation in the U.K. to be higher than in other countries.
Initiate a program to protect the pension scheme’s financial strength from the effects of U.K. inflation by indexing benefits paid by the scheme.
State whether each recommended action is correct or incorrect. Justify each of your responses with one reason
.

Here are some general requirements/instructions for the case study and roadmap questions to answer in your report. Please note that these questions merely serve as a roadmap to guide you through the case, and in-depth discussions about industry dynamics and business strategies beyond the scope of the questions require readings from other sources and are the key to getting bonus points.
Questions to answer:
Should the FRB move to establish a penalty rate in March 1921? Requirements/instructions
1. Grading:
Case Report – 100 points, plus up to 10 bonus points based on three dimensions – insight, comprehensiveness, and scientific format
2. Report Length: 1 – 2 pages, excluding title, reference, and meeting memo;
3. Similarity score of your report and articles from other sources below 25%;
4. Font size equal to or smaller than 12;
5. No more than double space;
6. Provide a complete list of references for works that you cite (APA style);
7. Submission: word

Cash Flows and Capital Budgeting Techniques (100 Points)
Complete the following problems:
Problem 1: Net Present Value (NPV) and Internal Rate of Return
Problem 2: Profitability Index (PI) and Payback Period
Problem 3: Uneven Cash Flows
Problem 4: Calculating Free Cash Flows
Problem 5: Calculating project cash flows and NPV
Complete the problems in an Excel spreadsheet. Be sure to show all your work on the Excel spreadsheet to receive credit; no hard keys.
book: https://drive.google.com/file/d/1bojoTLIcFlZhUT5QQ…

Here are some general requirements/instructions for the case study and roadmap questions to answer in your report. Please note that these questions merely serve as a roadmap to guide you through the case, and in-depth discussions about industry dynamics and business strategies beyond the scope of the questions require readings from other sources and are the key to getting bonus points.
Questions to cover:
Should the FRB move to establish a penalty rate in March 1921? Requirements/instructions
1. Grading:
Case Report – 100 points, plus up to 10 bonus points based on three dimensions – insight, comprehensiveness, and scientific format
2. Report Length: 1 – 2 pages, excluding title, reference, and meeting memo;
3. Similarity score of your report and articles from other sources below 25%;
4. Font size equal to or smaller than 12;
5. No more than double space;
6. Provide a complete list of references for works that you cite (APA style);
7. Submission: word

Format Requirement:
Case Report – 100 points, plus up to 10 bonus points based on three dimensions – insight, comprehensiveness, and scientific format.
Font size equal to or smaller than 12;
No more than double space;
Provide a complete list of references for works that you cite (APA style)
Questions to cover: Based on the Fed’s first seven years of experience, what reforms might be required?
Words: about 500 (just about 2 pages in word)
(I got the case study material in attachment)

Q1.
a. A company abandons the historical cost principle and adopts the LCNRV method of valuing inventory. Explain the process of LCNRV (Mark 1)

b. Abdullah Corporation gives you the following information about its inventory for four different products as on December 31st 2020.
Estimated Expected
Product Original Cost Completion Cost Selling Price
A SAR25 SAR10 SAR40
B SAR42 SAR20 SAR58
C SAR120 SAR40 SAR150
D SAR18 SAR5 SAR26
Using the lower-of-cost-or-net realizable value approach applied on an individual-product basis, compute the inventory valuation to be reported for each product on December 31, 2020. (Marks 2)

Q2.a. IFRS requires capitalizing actual interest (with modification) in self-constructed assets. What are the five steps necessary to meet IFRS requirement. (Marks 1)

On November 1, 2020, Saif Company contracted Ahmed Construction Co. to construct a building for SAR 1,600,000 on land costing SAR 400,000 (purchased from the contractor and included in the first payment). Saif made the following payments to the construction company during 2021.
Date
Amount SAR
1st Jan
500,000
1st Mar
400,000
1st Jun
350,000
1st Sep
500,000
1st Dec
250,000
Required: Compute weighted-average accumulated expenditures for 2021 (Marks 2)
Q3 Long-lived tangible asset are associated with either depreciations, impairments or depletions. Explain why companies revalue such assets on an annual basis, and give examples on depreciations, impairments and depletions. (Marks 3)
Q4. Firoz Corp. obtained a trade name in January 2010, incurring legal costs of SAR15,000. The company amortizes the trade name over 8 years. Firoz, successfully defended its trade name in January 2011, incurring SAR 4,900 in legal fees. At the beginning of 2012, based on new marketing research, Firoz determines that the recoverable amount of the trade name is SAR 12,000.
Required:
Prepare the necessary journal entries on amortization for the years ending December 31, 2010

This is an investment analysis of Pinterest
The assignment has two parts basically:
The first is all the background info, everything about the company that is found everywhere, and others people’s analyses.
Background (-Descriiption, -history, -segments, -geographic scope)
Recent Developments
Financials (tables and all) (found on their investor’s website, reports,…
Industry Analysis (Porter’s Five forces references)
Risks Factors
All those info can be found on the SEC Filings Website, Google, Yahoo, Yahoo Finance, and Seeking Alpha,…
The second part is basically “MY” Valuation, my analysis.
I was asked to do the DCF Analysis and base my explanation on that.
About my DCF, I have done one, but I do not agree with the “Share price” I am getting.
I think right now the company is “Overvalued” and it is a “SELL”, but not to the point where the share price would be negative or below $15.
So all you need to do about that would be to touch it up a little bit and get that price to a range between $15-$20
and explain how and why based on the DCF and other info you can find to back it up.
But if you feel otherwise, feel free to change (just let me know, and explain why)

I attached all the files you need
The guideline, Excel file with DCF (additional info), and an example of an analysis (way too long)

Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions.
• All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism).

1. How does collateral affect the interest rate on a bond? How does subordination affect the interest rate on a bond too? What else might affect the interest rate on a bond?
2. What is Chapter 7 liquidation? When should each be used? Please choose one company that has gone through either type of bankruptcy proceeding and describe the circumstances leading up to the filing.

What are the prices of a call option and a put option with the following characteristics?
Stock price = $64
Exercise price = $60
Risk-free rate = 2.7% per year, compounded continuously
Maturity = 4 months
Standard deviation = 62% per year
2. Draw the payoff picture at expiration for a long position in a call option that has a premium of $1.25 and a strike price of $30.
3. Draw the payoff picture for a short position in the call option given in Problem 2.
4. Draw the payoff picture at expiration for a long position in a put option that has a premium of $3.50 and a strike price of $80.
5. Draw the payoff picture for a short position in the put option given in Problem 4
Some videos you may find helpful.
Intro to Options
Option Quotes – Intrinsic Value and Time Value
Black Scholes Pt 1
Black Scholes Pt 2
Application to Corporate Finance
1. A company’s 6% coupon rate, semiannual payment, $1,000 par value bond that matures in 30 years sells at a price of $515.16. The company’s federal-plus-state tax rate is 25%. What is the firm’s after-tax component cost of debt for purposes of calculating the WACC? 2. The earnings, dividends, and stock price of Shelby Inc. are expected to grow at 7% per year in the future. Megan’s common stock sells for $23 per share, its last dividend was $2.00, and the company will pay a dividend of $2.14 at the end of the current year.a. Using the discounted cash flow approach, what is its cost of equity?b. If the firm’s beta is 1.6, the risk-free rate is 9%, and the expected return on the market is 13%, then what would be the firm’s cost of equity based on the CAPM approach?c. If the firm’s bonds earn a return of 12%, then what would be your estimate of rs using the own-bond-yield-plus-judgmental-risk-premium approach? (Hint: Use a 4% risk premium.)d. On the basis of the results of parts a—c, what would be your estimate of Shelby’s cost of equity?3. Suppose the Big Boat Company has this book value balance sheet:Current assets$30,000,000Current liabilities$20,000,000Notes payable 10,000,000Fixed assets 70,000,000Long-term debt 30,000,000Common stock (1 million shares 1,000,000Retained earnings 39,000,000Total assets$100,000,000Total liabilities and equity$100,000,000The notes payable are to banks, and the interest rate on this debt is 10%, the same as the rate on new bank loans. These bank loans are not used for seasonal financing but insteadare part of the company’s permanent capital structure. The long-term debt consists of 30,000 bonds, each with a par value of $1,000, an annual coupon interest rate of 6%,and a 20-year maturity. The going rate of interest on new long-term debt, r d, is 10%, and this is the present yield to maturity on the bonds. The common stock sells at a price of $60 per share. Calculate the firm’s market value capital structure.
4. The following table gives the current balance sheet for Travellers Inn Inc. (TII), a company that was formed by merging a number of regional motel chains.Travellers Inn (Millions of Dollars)Cash$ 10Accounts payable$ 10Accounts receivable 20Accruals 15Inventories 20Short-term debt 0 Current assets$ 50 Current liabilities$ 25Net fixed assets 50Long-term debt 30Preferred stock (50,000 shares) 5Common equity (3,800,000 shares$ 10Retained earnings 30 Total common equity$ 40Total liabilities and equity$ 100
The following facts also apply to TII.
(1) The long-term debt consists of 29,412 bonds, each having a 20-year maturity, semiannual payments, a coupon rate of 7.6%, and a face value of $1,000. Currently, these bonds provide investors with a yield to maturity of 11.8%. If new bonds were sold, they would have an 11.8% yield to maturity.(2) TII’s perpetual preferred stock has a $100 par value, pays a quarterly dividend per share of $2, and has a yield to investors of 10%. New perpetual preferred stock would have to provide the same yield to investors, and the company would incur a 3.85% flotation cost to sell it.(3) The company has 3.8 million shares of common stock outstanding, a price per share = P0 = $20, dividend per share = D0 = $1, and earnings per share = EPS0 = $5. The return on equity (ROE) is expected to be 10%.(4) The stock has a beta of 1.6%. The T-bond rate is 6%, and RPM is estimated to be 5%.(5) TII’s financial vice president recently polled some pension fund investment managers who hold TII’s securities regarding what minimum rate of return on TH’s common would make them willing to buy the common rather than TII bonds, given that the bonds yielded 11.8%. (6) TII is in the 25% federal-plus-state tax bracket.Assume that you were recently hired by TII as a financial analyst and that your boss,the treasurer, has asked you to estimate the company’s WACC under the assumptionthat no new equity will be issued. Your cost of capital should be appropriate for use in evaluation projects that are in the same risk class as the assets TII now operates. Based on your analysis, answer the following questions.a. What are the current market value weights for debt, preferred stock, and common stock? (Hint: Do your work in dollars, not millions of dollars. When you calculatethe market values of debt and preferred stock, be sure to round the market price perbond and the market price per share of preferred to the nearest penny.)b. What is the after-tax cost of debt?c. What is the cost of preferred stock?d. What is the required return on common stock using CAPM?e. Use the retention growth equation to estimate the expected growth rate. Then usethe expected growth rate and the dividend growth model to estimate the requiredreturn on common stock.f. Use the required return on stock from the CAPM model, and calculate the WACC.
8. Cost of Capital for Tesla
Let’s return to the case involving Tesla’s project for the Minivan. In Week 2, we estimated the cash flows, which is the first step in analyzing project. We now need to estimate Tesla’s cost of capital in order to continue our analysis of the project. Use the 10-year Treasury Bond rate as the risk free rate and assume that the market risk premium is 6.5% to find Tesla’s cost of equity. Assume that Tesla’s bonds are rated AAA and that Tesla’s corporate tax rate is 21%. Assume that Tesla’s bonds have no floatation costs, but the cost of issuing equity is 3.5%. Find Tesla’s weighted average cost of capital. Assume that the project will be financed with internal funds. You will need to find additional financial information from the Wall Street Journal and online at sites like http://finance.yahoo.com to complete your calculation. Use Tesla’s debt-to-equity ratio to compute the percentages of debt and equity.Do this analysis in the same spreadsheet where you computed the operating cash flows for the project. Put the work in a separate tab. Next week, when we tackle capital budgeting, we’ll use these cost of capital and cash flow estimates to determine if the project is desirable.
Some videos you may find helpful.Cost of EquityCost of Issuing New EquityCost of Debt and Preferred StockWeighted Average Cost of Capital

What are the prices of a call option and a put option with the following characteristics?
Stock price = $64
Exercise price = $60
Risk-free rate = 2.7% per year, compounded continuously
Maturity = 4 months
Standard deviation = 62% per year
2. Draw the payoff picture at expiration for a long position in a call option that has a premium of $1.25 and a strike price of $30.
3. Draw the payoff picture for a short position in the call option given in Problem 2.
4. Draw the payoff picture at expiration for a long position in a put option that has a premium of $3.50 and a strike price of $80.
5. Draw the payoff picture for a short position in the put option given in Problem 4
Some videos you may find helpful.
Intro to Options
Option Quotes – Intrinsic Value and Time Value
Black Scholes Pt 1
Black Scholes Pt 2
Application to Corporate Finance
1. A company’s 6% coupon rate, semiannual payment, $1,000 par value bond that matures in 30 years sells at a price of $515.16. The company’s federal-plus-state tax rate is 25%. What is the firm’s after-tax component cost of debt for purposes of calculating the WACC? 2. The earnings, dividends, and stock price of Shelby Inc. are expected to grow at 7% per year in the future. Megan’s common stock sells for $23 per share, its last dividend was $2.00, and the company will pay a dividend of $2.14 at the end of the current year.a. Using the discounted cash flow approach, what is its cost of equity?b. If the firm’s beta is 1.6, the risk-free rate is 9%, and the expected return on the market is 13%, then what would be the firm’s cost of equity based on the CAPM approach?c. If the firm’s bonds earn a return of 12%, then what would be your estimate of rs using the own-bond-yield-plus-judgmental-risk-premium approach? (Hint: Use a 4% risk premium.)d. On the basis of the results of parts a—c, what would be your estimate of Shelby’s cost of equity?3. Suppose the Big Boat Company has this book value balance sheet:Current assets$30,000,000Current liabilities$20,000,000Notes payable 10,000,000Fixed assets 70,000,000Long-term debt 30,000,000Common stock (1 million shares 1,000,000Retained earnings 39,000,000Total assets$100,000,000Total liabilities and equity$100,000,000The notes payable are to banks, and the interest rate on this debt is 10%, the same as the rate on new bank loans. These bank loans are not used for seasonal financing but insteadare part of the company’s permanent capital structure. The long-term debt consists of 30,000 bonds, each with a par value of $1,000, an annual coupon interest rate of 6%,and a 20-year maturity. The going rate of interest on new long-term debt, r d, is 10%, and this is the present yield to maturity on the bonds. The common stock sells at a price of $60 per share. Calculate the firm’s market value capital structure.
4. The following table gives the current balance sheet for Travellers Inn Inc. (TII), a company that was formed by merging a number of regional motel chains.Travellers Inn (Millions of Dollars)Cash$ 10Accounts payable$ 10Accounts receivable 20Accruals 15Inventories 20Short-term debt 0 Current assets$ 50 Current liabilities$ 25Net fixed assets 50Long-term debt 30Preferred stock (50,000 shares) 5Common equity (3,800,000 shares$ 10Retained earnings 30 Total common equity$ 40Total liabilities and equity$ 100
The following facts also apply to TII.
(1) The long-term debt consists of 29,412 bonds, each having a 20-year maturity, semiannual payments, a coupon rate of 7.6%, and a face value of $1,000. Currently, these bonds provide investors with a yield to maturity of 11.8%. If new bonds were sold, they would have an 11.8% yield to maturity.(2) TII’s perpetual preferred stock has a $100 par value, pays a quarterly dividend per share of $2, and has a yield to investors of 10%. New perpetual preferred stock would have to provide the same yield to investors, and the company would incur a 3.85% flotation cost to sell it.(3) The company has 3.8 million shares of common stock outstanding, a price per share = P0 = $20, dividend per share = D0 = $1, and earnings per share = EPS0 = $5. The return on equity (ROE) is expected to be 10%.(4) The stock has a beta of 1.6%. The T-bond rate is 6%, and RPM is estimated to be 5%.(5) TII’s financial vice president recently polled some pension fund investment managers who hold TII’s securities regarding what minimum rate of return on TH’s common would make them willing to buy the common rather than TII bonds, given that the bonds yielded 11.8%. (6) TII is in the 25% federal-plus-state tax bracket.Assume that you were recently hired by TII as a financial analyst and that your boss,the treasurer, has asked you to estimate the company’s WACC under the assumptionthat no new equity will be issued. Your cost of capital should be appropriate for use in evaluation projects that are in the same risk class as the assets TII now operates. Based on your analysis, answer the following questions.a. What are the current market value weights for debt, preferred stock, and common stock? (Hint: Do your work in dollars, not millions of dollars. When you calculatethe market values of debt and preferred stock, be sure to round the market price perbond and the market price per share of preferred to the nearest penny.)b. What is the after-tax cost of debt?c. What is the cost of preferred stock?d. What is the required return on common stock using CAPM?e. Use the retention growth equation to estimate the expected growth rate. Then usethe expected growth rate and the dividend growth model to estimate the requiredreturn on common stock.f. Use the required return on stock from the CAPM model, and calculate the WACC.
Some videos you may find helpful.Cost of EquityCost of Issuing New EquityCost of Debt and Preferred StockWeighted Average Cost of Capital

For this assignment, complete the Module One tab in the Final Project II Milestone Workbook describing your currency portfolio and your justification for the choice of each currency.In each module, you will provide an update on the investment you made in Module One and adjusted in Module Four. After entering the quantity, visit OANDA. (OANDA is the Olsen

There are seven important requirements for this question. 1. The crucial part of this question is the explanations and list out every single symbols, formulas, algebra steps whether it is about the differentiation, the summation operator or anything as to explain to a primary school student who has not done this subject and know nothing about this topics. Which means I would need all the theories, step by step, and all the symbols in details. 2. The actual answers, the actuals answers must be incorporate with the explanations as shown as something in the screenshot sample where the explanations and the actual answers are combined together. 3. I will have many questions to follow afterward and the tutor must be very welcoming and have the right attitude to answer any concerns I have. The answers must be typed In a word document, with all the formulas or any algebra manipulation typed in the word document using the formula option. 4. List all the necessary formulas, theories at the end of a document as a summary sheet for the key ideas and key points for these questions. 5. Please draw out the diagrams with the explanations of each of the labels that is within the diagram and what does it mean and how to draw out the diagrams. 6. Please put in the external links about the relevant websites and the relevant theories. 7. Please prepare a summary of the formulas, key theories used at the end of the document.
For example, the question starts with 1. List out all the necessary symbols, formulas, theories. 2. Explain what the 1 list out . 3. The answer with all the manipulation steps with the explanations of each manipulation and each algebra. 4. Enthusiastic attitude about any queries I am having. 5. Clear all my following concerns with the right attitude and polite and respond to all of them. 6. Work in the long run if this one works out well and satisify all the requirements then we will work in the long run.
The two pdfs attached are one for the question part and the second one for the answer part with the third one with the answers and the explanations as the sample I am looking for.
I look forward to work with the tutor in the long run for months if we work this question out well, thank you for your time.

Hurray, it is now closing day! All title issues identified in discussion 2 (Week 2) have been successfully resolved. You are now at the closing table and your real estate closing attorney is reviewing each of the closing documents with you and your spouse. Prior to signing them, certain items are brought to you and your spouse’s attention that must be addressed as follows:

Decide how to hold title (assume in your State residential property may be titled in joint tenancy, tenant by the entirety, tenants in common). Describe the pros and cons of each form of ownership. In making your decision, consider that your spouse has significant credit card balances and student loans outstanding which were incurred prior to the marriage.
Your attorney asks you to consider placing your property in a living trust. Describe the advantages of a living trust and discuss the pros and cons of placing the property in a living trust. What did you decide?
Your waterfront property has river frontage, and you want to know what type of water rights come with the property ownership. You are not sure if the river is classified as navigable or non-navigable. Describe the difference between littoral and riparian water rights and the impact on these rights if the river found to be navigable.

Congratulations, the seller has accepted your purchase offer! You are anxious to close the deal and take possession of the property within 60 days from the seller’s acceptance date. You have been made aware of potential title issues that may delay the closing. You have asked title company to provide you with a preliminary title search to identify any title defects. Your review of the preliminary title search has revealed the following:

Appurtenant easement (your property is the dominant tenement)
Easement in gross (the easement owner is dead)
Specific lien for the first mortgage placed against the property by the seller
Mechanics lien recorded by new window replacement contractor for unpaid materials and installation services
Lien recorded by property association for last year’s unpaid annual dues
Lien for unpaid real estate taxes
Address the following in your initial post:

Describe the difference between the appurtenant easement and easement in gross. Will either of them cause a delay in closing? Why or why not?
Describe the differences between the specific lien and mechanics lien? Will either of them cause a delay in closing? Why or why not?
Identify the lien classification type for the unpaid association dues and the delinquent real estate taxes. Will either of them cause a delay in closing? Why or why not?
How are lien priorities established and which one of the above liens has the highest priority?
All posts must include properly formatted APA-style citations.

Jamala has accepted a job promotion and must relocate to a different state. She is undecided if she should sell her current residence or rent it out. What factors should she consider in making this decision?

To contextualize your response, select a location to use as Jamala’s current residence (i.e. your current city, your hometown, etc.). Your response, at a minimum, must specifically address the following factors with regard to the selected location:

Economic factors (supply/demand)
Real estate classification
Zoning
Real estate services

All posts must include properly formatted APA-style citations.

MT was founded eight years ago by Martha Masters. Martha found a method to streamline the manufacturing process, resulting in a cheaper tool. The tools manufactured by MT are designed for the mass market and sold primarily through retail. The company is privately owned by Martha and her family, and it had sales of $97 million last year.
MT primarily sells to do-it-yourself (DIY) customers who use the tools for personal projects, although it does sell through various online marketplaces. As a result, the company’s sales are price sensitive. When the company had sufficient capital, it would expand production. Relatively little formal analysis has been used in its capital budgeting process. Martha has just read about capital budgeting techniques and has come to you for help. For starters, the company has never attempted to determine its cost of capital, and Martha would like you to perform the analysis. Because the company is privately owned, it is difficult to determine the cost of equity for the company. Martha wants you to use the pure play approach to estimate the cost of capital for MT, and she has chosen Snap-On Incorporated as a representative company. The following questions will lead you through the steps to calculate this estimate.
1. Most publicly traded corporations are required to submit 10-Q (quarterly) and 10-K (annual) reports to the SEC detailing their financial operations over the previous quarter or year, respectively. These corporate filings are available on the SEC website at www.sec. gov. Go to the SEC website, follow the “Company Filings” link, and search for SEC filings made by Snap-On (SNA). Find the most recent 10-Q and 10-K and download the forms. Look on the balance sheet to find the book value of debt and the book value of equity.
2. To estimate the cost of equity for SNA, go to finance.yahoo.com and enter the ticker symbol “SNA.” Follow the various links to find answers to the following questions: What is the most recent stock price listed for SNA? What is the market value ofequity, or market capitalization? How many shares of stock does SNA have outstanding? What is the forward annual dividend? Analysts have estimated a 6 percent growth rate for dividends. What is the cost of equity for SNA using the DDM? What is the beta for SNA? Now go back to finance.yahoo.com and follow the “Bonds” and “U.S. Treasury Bonds Rates” links. What is the yield on 3-month Treasury bills? Using the historical market risk premium, what is the cost of equity for SNA using the CAPM? What is your final estimate for the cost of equity?
3. Go to www.reuters.com and find the list of competitors in the industry. Find the beta for each of these competitors and then calculate the industry average beta. Using the industry average beta, what is the cost of equity? Does it matter if you use the beta for SNA or the beta for the industry in this case?
4. You now need to calculate the cost of debt for SNA. Go to finra-markets.morningstar. com/BondCenter, enter SNA as the company, and find the yield to maturity for each of SNA’s bonds. What is the weighted average cost of debt for SNA using the book value weights and the market value weights? Does it make a difference in this case if you use book value weights or market value weights?
5. You now have all the necessary information to calculate the weighted average cost of capital for SNA. Calculate the weighted average cost of capital for using book value weights and market value weights assuming 21 percent marginal tax rate. Which cost of capital number is more relevant?
6. You used SNA as a representative company to estimate the cost of capital for MT. What are some of the potential problems with this approach in this situation? What improvements might you suggest

Week 9: Interactive activity9.1 Learning Outcomes:
Define money market securities.
Explain how money market securities are used.
Explain how the various participants in the money markets benefit from access to low-risk, short-term investments.
Compare and contrast the characteristics of the various money market instruments.
Explain the purpose of the capital market.
Differentiate between the various instruments of the capital market.
Differentiate between the tools available to stockholders and bondholders to protect their investments.
Compute the value of a bond.
Explain how the value of bonds fluctuate with the current market prices.
Differentiate between the operation of an organized exchange and an over the counter exchange.
Explain the difficulties involved with stock valuation and how they are addressed.
Explain the mechanism that sets stock prices on a day to day basis.

9.2 Action Required:
Read Chapter 11, 12 and 13

9.3 Test your Knowledge (Question):
Provide an example that how money market securities are used.
Differentiate between Municipal and Corporate Bond.
Discuss that how stock are sold.

9.4 InstructionsAnswer the question in test your knowledge section.
Please Avoid plagiarism, the work should be in your own word.
Must mention question number clearly in their answer.
Improve your answers with more rich content and explanation.

The Assignment must be submitted on Blackboard (WORD format only) via allocated folder.
Assignments submitted through email will not be accepted.
Clear and well presented, marks may be reduced for poor presentation.
Must mention question number clearly in their answer.
Avoid plagiarism, the work should be in your own words.
All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism).
Improve your answers with more rich content and explanation.

Suppose you were a fixed income trader. Choose 3 Italian Government bonds with maturities equal to 5, 10 and 20 years respectively and compute their Duration and Convexity. Please quantify the impact of the foregoing monetary policy choices on your portfolio (for simplicity, assume a parallel shift in the yield curve). Do not forget to provide
with a detailed overview of the relationship between bond prices and interest rate levels.

I WILL APPLY THE ENTIRE ESSAY GUIDELINES BUT I ONLY NEED THE SECOND (2) QUESTION. THANK YOU