Manufacturing company borrows 8 million euros from the bank to fight the consequences of the corona virus. The repayment schedule is based on an annuity. The interest rate is 8% and the loan is paid back with 6 annual payments. Question: * What is the loan balance immediately the first loan payment is made?

2.Your friend prepares an annual report and has calculated several financial ratios in this regard. Unfortunately, he has difficulties interpreting some ratios. In this context, he asks for your help in identifying the economic reasons for the following trends (explain each example in a few sentences): a. days in inventories has increased considerably b. Net profit margin has steadily decreased but ROIC has remained stable c. Company's net working capital has increased from 1 million to 2 millions eur d. The company's share P / E ratio is significantly lower than for its main competitors

3.You have gathered information about the expected returns and standard deviations of two stocks, which is given in the table below: Expected return Standard deviation Bull Inc 10.0% 30.0% Bear Inc 6.0% 20.0% a. Discuss which stock is more attractive and why? (hint: think about the assumptions first) You are going to form a portfolio, which includes these two stocks. The value of your total portfolio is 800 000 and investment into stock B is 60% of the total portfolio. b. It is estimated that the correlation between the stock returns is -0.50. Explain, what does this result mean? c. Calculate the portfolio risk and expected return, and explain the benefits of diversification. (Show your work, you may upload the solution file)

4.Your task is to find the value of a company stock. You have the following information: a) Investors expect 10 EUR dividend next week. Buying stock today entitles you to receive that dividend b) Dividends are expected to stay constant for the next three years. c) However, dividends are expected to start growing 3% a year starting from year 4. d) Expected return from investments with comparable risk is 13%. Question: 1. Based on information above, what is the fundamentally justified price of a stock? 2. You observe that the current market price is 95 EUR. What should be your investment strategy given your calculations above. Even if you were not able to estimate the price, you can still describe your course of action

5.Please describe what is CAPM and it's components? How required rate of return from CAPM should be interpreted?