Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Can someone please help me with these questions ASAP. I need these soon. and all work must be shown. 2. Identify and calculate possible profit

image text in transcribed

Can someone please help me with these questions ASAP. I need these soon. and all work must be shown.

image text in transcribed 2. Identify and calculate possible profit opportunity using $1millon to make your point. [10] Explain the impact of your actions on anybody who tries to mimic your strategy after you. [5] Spot rate (Romulan/$) 1.281 3-mo forward (Romulan/$) 1.274 US dollar 3-month interest rate 4.80% Romulan land 3-mo rate 3.20% 3. A recent graduate was hired to lead a small public company. In an effort to increase the stock price of the company he proposed increasing the dividends of the company. He explained \"since the stock price is basically based off of present value of all future dividends, the stock price will go up if we increase dividends paid to shareholders.\" Do you agree? Explain. 6. Your company produces shoes in Vietnam and sells in Europe. Recently a new progressive government was elected in Vietnam. Due to its new policies there is high level of FDI going on in Vietnam. The standard of living has improved. Minimum wage has gone up significantly. The currency has appreciated significantly with respect to Euro. Does your company face any exposure? If yes, recommend a course of action. 8. How much more would you be willing to pay for a security that pays $100 quarterly for 10 years compared to one that pays $100 quarterly forever? Assume 12% APR 12. Eureka, Inc., a US-based company does business in Ukraine also. The currency of Ukraine, hryvnia, is very volatile. There is always the possibility that hryvnia will depreciate with respect to the dollar. The company will have to reports its assets in Ukraine at lower value when consolidating its financial statements. Given this possibility the CFO of the company has asked you to recommend an appropriate action. Value of Ukrainian assets today 60 million hryvnia Spot rate 1USD = 6.70 hryvnia 180 day forward rate: 1 USD = 6.78 hryvnia Interest rate in US = 6% Interest rate in Ukraine = 10% There are no currency options traded on NYSE for hryvnia. 16. Two banks, A & B, with assets of $100 million each experience severe decline in the value of their equity when interest rates suddenly increases by 3%. However the losses experienced by bank A were two times that experience by Bank B? What do you think was the likely reason behind this observation? 17. Say for example AAPL has $60 billion in cash, $500 billion of equity, $0 in debt, $500 billion of assets, and ROE of 35%. Its competitors have ROE in the range of 10% to 20%. Based on the concepts you have learned in this class do you think there is still a lot more potential for the company to improve its ROE. If yes, how? If not, why

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

International Financial Reporting A Practical Guide

Authors: Alan Melville

6th edition

1292200743, 1292200766, 9781292200767, 978-1292200743

More Books

Students also viewed these Finance questions