# Pecentage Fomat Case Study

2045 Words 8 Pages
Table 9 shows the bond profit and interest profit in pecentage fomat. The first row showing year 1989 would mean year 1989 is the year where the investment was started, not the year where the profit will be obtained. This means for year 1989, the profits will be obtained at year 1999. The bond profit is calculated by multiplaying the bond rate and the total devaluation after 10 years. For instance, for year 1989, the bond rate was 10.27 (Table 4) and total devaluation is 8.95. This will give a value of 91.92% (values are slightly different due to significant numbers taken). The values in Table 9 are more accurate as it was one using Microsoft Excel and taking the exact value instead of onl 4 significant figures. The same calculation were repeated until year 2001 using Microsoft Excel.
Thirdly, for the interest profit calculation, the assumption that all of the money supply was kept in the bank for the whole 10 years was made. This means all the profit from interest is only usable at the end of the tenth year but as for bond, the profit was received annually. This is an advantage for the bond as the money received earlier could be used for other purposes.

The interest profit is calculated by multiplying the interest rate of the chosen year and 9 years after that in percentage
As can be seen in Table 10, the averaged bond rate is always higher than the averaged inflation rate. This make sense as for real profit from bond would be the taking away the inflation rate from the bond rate. If the bond rate is lower or the same magnitude as inflation rate, then there would be no profit and perhaps even a loss. The real bond profit decreases as the years pass. This is due to the reduction in the bond rate as the inflation rate does not fluctuates much after year 1992. The averaged bond rate and averaged inflation rate were than plotted against each other as shown in Figure 8

• ## Foot Locker's Dividend Policy Analysis

For Foot Locker, with a dividend value of €1.10, using an average dividend growth rate over the last 5 years of 8.5% and a discount rate of 12% we can calculate that the present value of future dividends is €31.43 which is less than the current stock value of 66.65. This model has its limitations given the fact that predicting dividend growth rate may not be accurate, however the model shows that Foot Locker is in fact over-valued and thus would not be recommended to buy if the investor was looking for a 12%…

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• ## Wentdt Corporation Case Study

Retained earnings, year 1 \$632MM Add Net Income, year 2 35MM Less Dividends year 2 (2)MM Retained earnings, year 2 \$665MM its most recent financial statements, Newhouse Inc. reported \$50 million of net income and \$810 million of retained earnings. The previous year, its balance sheet showed \$780 million of retained earnings. What were the total dividends paid to shareholders during the most recent year? Finance Answers (1) • [pic] Not yet rated Anonymous - 14 minutes later This is an easy question, free points on the exam. It's actually more of an accounting questions than finance... You need to know this formula to answer the question Beginning Retained Earnings + Net Income - Dividends Equals Ending Retained Earnings We are given everything in this problem but the dividends Beginning Retained Earnings (780M) +Net Income (50M) - Dividends (?)…

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• ## June 15 Case Study

The actual was 2.35. I did not have any economic data supporting my guess. Nonetheless, the rate that treasury bonds increase is based on the demand, and the yield as an opposite effect. Since interest rates and inflation are low. The demands for Treasury notes are low, increasing the yield for 10 year treasury notes.…

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• ## Characteristics Of Callable Bonds

The bond matures in 10 years, but the issuer can call the bond for face value (\$1,000) in two years if they choose. You buy the bond for \$960, a discount to face value. Given this information, we can calculate the effective yield until the call date as follows:…

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• ## Nt1330 Unit 1 Case Study

As discussed SIMP is the first highly modifiable software based amortization model. The demo we are about to review was optimized with to consider borrowers will either sell or refinance their homes within 10 years. In this example we have optimized SIMP to reduce principal at approximately the same pace as the 15 year show them please refer to column X . 15 year mortgage reduces the principal balance of a loan by 10 % in just over 2 years, now lets take a look at SIMP please go to column K as you can see it takes SIMP a few months more. There is one major caveat of the 15 mortgage I would like to go over , please refer to cell B10 as you can see SIMP monthly payment is \$161 less than the 15 year, thus SIMP borrowers will have…

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• ## Case Study Of Tesco's Liquidity

This ratio helps analysts describe Tesco’s ability to cover its annual interest. This is found by dividing Tesco’s earnings before interest and tax or EBIT by Tesco’s annual interest expenses. Tesco would want a high interest coverage ratio because that would mean they are earning multiple times the required yearly interest payment. If Tesco can not pay its interest by more than 1.5 times, it would not be doing very well in terms of debt management. According to the annual report, Tesco’s EBIT as of Feb 25, 2017 was 1,017 million GBP.…

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• ## Oil Price Essay

In July 2008, during half year it lost almost 70% of its value by reaching its maximum ( 147.26\$ per barrel). As a main reason of that “boom”, excessively heat with speculative capital was shown by analytics. Although, principally 100\$ for a barrel is acceptable, but its price ,definitely, can not be 140\$. As a result, oil price was stabilized around 40-50\$/barrel, but dropped till 38-42\$/barrel in spring 2009. At that time, it get rid of dependency of dynamic of USA currency.…

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• ## Dr Pepper Snapple Group Financial Analysis

We found that Dr Pepper and Snapple Group Incorporated’s, long-term debt rating was a BBB+. We then matched it to the best fit from the average yield of US corporate bonds by maturity and rating table. For the public bonds, we used Yield to Maturity to calculate their costs, using the excel function “=frequency*rate (n, pmt, pv, fv)”. To then find the cost of common stock we had to do the three different methods and take the average. The first method used was CAPM and we used the risk-free interest rate given from the company’s 10K report.…

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• ## Mercury Footwear Case Study

(10 points) • The projections for revenue are higher than past trends could suggest. For example Men’s casual shoes had negative revenue growth in the past few years but in Liedtke’s projections he has the growth increasing 2% then 3% a year later which seems high. Should be more conservative based on past trends. • Next CAGR is a calculation that Liedke used to find the compound annual growth rate. However this calculation does not include any risks so it does not take systematic risk into account which could cause some problems in the valuation • Another thing that is somewhat questionable in Liedtke’s projections was how he said he would be integrating the women’s line from Mercury but in the projections sheet he has written off the line which will reduce the revenue for the valuation of mercury.…

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• ## The Great Moderation: The Period Between 1980 And 2000

Contractionary monetary policy slows the rate of growth and money supply or completely decreases the money supply in order to control inflation (Hubbard, R., & O’Brien, A., 2015). Sometimes it can slow economic growth, increase unemployment, and decrease borrowing and spending by consumers and businesses. In the 2000’s mild recession the government increased the money supply to control inflation. This expansionary monetary policy makes us wonder if the Fed had not changed the emphasis it put on inflation versus the output in the estimated rule or if it had not drifted from the behavior presented by that rule, would the macroeconomic condition leading up to the great recession have turned out differently? The main purpose of discount lending is to ensure short term financial stability to prevent bank panics and the sudden collapse of financial institutions experiencing a financial crisis, such as the 2001 9/11 attacks.…

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