Question
Help please! 1. Which of the following statements about valuing a firm using the compressed adjusted present value (CAPV) approach is most correct? Group of
Help please! 1.
Which of the following statements about valuing a firm using the compressed adjusted present value (CAPV) approach is most correct? |
Group of answer choices
a. The CAPV approach stands for the accounting pre-valuation approach.
b. The value of equity is calculated by discounting the horizon value and the free cash flows at the cost of equity.
c. The value of operations is calculated by discounting the horizon value, the tax shields, and the free cash flows at the cost of equity.
d. The value of operations is calculated by discounting the horizon value, the tax shields, and the free cash flows before the horizon date at the unlevered cost of equity.
e. None of the above
2.)
Which of the following statements about forward and futures contracts is most correct? |
Group of answer choices
a. Futures contracts don't have any margin requirements but forward contracts do.
b. Goods are never delivered under forward contracts, but are almost always delivered under futures contracts.
c. One advantage of forward contracts is that they are default free.
d. There are futures contracts for currencies but no forward contracts for currencies.
e. None of the above
3.)
A swap is a method used to reduce financial risk. Which of the following statements is not correct? |
Group of answer choices
a. A company can swap fixed interest payments for floating interest payments
b. A swap involves the exchange of cash payment obligations
c. Swaps are very often arranged by a financial intermediary, who may or may not take the position of one of the counterparties.
d. The earliest swaps were currency swaps, in which companies traded debt denominated in different currencies, e.g., dollars and yen.
e. None of the above
4.)
The March CBOT Treasury bond futures contract has a quoted price of 97'12. If annual interest rates go up by 1.25 percentage point, what is the gain or loss on the futures contract? Round to the nearest whole dollar. |
Group of answer choices
a.($8,499)
b. ($12,619)
c. ($21,214)
d. ($22,995)
e. None of the above Can some help quickly please!!!!
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