Please help me with all questions on this final! It is due on Friday, July 28. I asked my professor for help on explaining what I did wrong for the midterm which was very similar to this and he told me to read through the book which I did while working on the midterm. I need a 95 on this final to pass this class and my teacher has been absolutely no help.

Business Finance BADM 310 Final Exam- online 100 POINTS Summer 2017 1. Look up Amazon (AMZN) and Ali Baba Group (BABA) stocks on yahoo finance and answer the following (15 PTS) a. Which one is more liquid? Explain. (5 PTS) b. What is the enterprise value for both companies? (5 PTS) c. Luke wants to own enough stock of Amazon to be able to control their decisions. How much money does he need to come up with? Note that in order have control, he needs to have 51% ownership. (5 PTS) d. (Optional Question): Jason is sitting on the board of Amazon and wants to avoid a take-over by Luke. What suggestions do you have for him? (THERE ARE NO POINTS FOR THIS PART) 2. Susan wants to buy a house for $300,000. US Bank will give her the loan at 3.3% for 30 years if she puts 15% down and Dacotah Bank will give her the loan at 3.6% for 30 years if she puts 12% down. There are NO other options. (15 PTS) a. Which loan should she sign up for? Explanation needed. What is her monthly payment? (5 PTS) b. After 5 years, Susan is approached by a philanthropic group known as C.S.C. They offer to lend her $50,000 interest free for an indefinite period of time, provided she joins their group. Susan takes up the offer and uses the money to pay off some of her mortgage. What will be her new NPER (how many years will it take for her to pay off her remaining mortgage)? (5 PTS) c. After another 7 years, a private bank offers to take over the remaining mortgage at 3%. What will be her first month interest payment if she signs up with them? (To do this, find the remaining mortgage after 12 years. Use this mortgage amount as the new principle. First month interest payment will be the monthly rate multiplied by principle). (5 PTS) d. (Optional Question): Assume, there is a $1,000 one-time processing fee for signing up with the private bank in the previous part (c). Does it make sense to move the mortgage over to the private bank @ 3%? Explain. (THERE ARE NO POINTS FOR THIS PART) 3. Elliot makes $300,000 a year and pays 25% taxes on $150,000 and 30% on his remaining salary. His expenses are $110,000 (per year). He wants to invest a fixed amount EVERY day into an investment fund for 5 years and he hopes to get a 12% return. (20 PTS) a. What is the maximum amount he can invest every day? (5 PTS) (Find the annual investment amount and divide by 365). b. What will be the worth of his portfolio after 5 years? (5 PTS) c. After 5 years, Kassidy's income increases to $350,000. He wants to reinvest for another 5 year, but this time, his return will be 10% and his expenses have increased by 15%. What will be the worth of his portfolio after 5 years (total of 10 years)? (5 PTS) d. What will the Present Value of his portfolio, assuming a 6% discount rate and NPER is 10 years? (5 PTS) 4. Look up annual dividend of Microsoft (MSFT) on finance.yahoo.com. Assuming Microsoft dividend grows by 3% every year for 10 years and the discount rate is 6%. (10 PTS) a. What is the intrinsic price of Microsoft today and is it more or less than the market price? (5 PTS) b. What will be the intrinsic price of Microsoft stock 10 years from now? (5 PTS) 5. Henry, a direct descendant of Jefferson Morgan has inherited $450,000. A financial advisor tells her to invest this amount and target an average of at least 8% return over a 30 years. Henry decides to invest in a Northern Endowment Fund that has had a ten year average return of 8.5%. During the same time, S&P500 has had a 11% return (this is market return). The risk free return is 3% and the beta of the fund is 0.8. (10 PTS) a. What is the discount rate? (5 PTS) b. Would a beta of 1.1 increase her returns? (5PTS) 6. Rierson owns a garment factory in Spain and sells designer clothes to US and other European countries. He is trying attract some investments from US that he can use to expand further into the US market. US investors are looking for Instructor: Mustafa Maqbool Page 1 Business Finance BADM 310 Final Exam- online 100 POINTS Summer 2017 stable cash flow, which is going to be a challenge given that the fashion industry is changing constantly and he can get stuck with unsold inventory. To allay their fears, Rierson decides to investment some of the capital raised into Italian 10 year Government Bonds. He explains that the return from these bonds will be used to improve his operations. Ignoring currency exposure, consider the following: (10 PTS) a. He decides to invest into ten year 1,000 EURO Government bond with 8% coupon rate and semi-annual coupons. If the bond is currently trading for a price of 957.35 Euros, what is the bond's yield to maturity? Assume is buys 10,000 of these bonds. (5 PTS) b. Suppose he is told that the yield to maturity has increased to 15% (expressed as an APR with semiannual compounding). What price is the bond trading for now? (5 PTS) 7. Let's assume you want to retire with $1,500,000 in your investment portfolio. Given that your investment timeline is 40 years, the return on investment is going to average 7.5% and you plan to contribute a fixed amount every year for 40 years. What will be this amount? (5 PTS) 8. I am offering each of you a choice: A nominal return of 7% on your investment if you invest in US A nominal return of 6% on you investment if you invest in Ireland. Which option will give you the highest real rate of return? (Calculate the average inflation for the last 5 years for each country and use that to calculate the real rate of return. Inflation rate can be found online). (5 PTS) 9a. 9b. Is it better to invest 2 dollars a day for 30 years at 3% or invest 1 dollar a day for 30 years at 6% (5 PTS) How many years will the return of one of these investments exceed the other? (5 PTS) Instructor: Mustafa Maqbool Page 2