5. Financial ratio analysis – Interpretation (External analysis)
The current ratio of Dutch Lady in year 2013 is 1.91 times. It means that it has RM1.91 in current asset for every RM1 in current liability. It also means that Dutch Lady has its current liability covered 1.91 times over.
The current ratio of Nestle in year 2013 is 0.90 times. It means that it has RM0.90 in current asset for every RM1 in current liability. It also means that Nestle has its current liability covered…
Compare/Contrast Essay Outline—Point by point Method
λ General Topic: Comparison of working for different investment banks
λ Specific Topic: Comparison of working for JPMorgan and Morgan Stanley
λ Areas to be covered: career interests, location preferences, endurance of working
λ Topic Sentence: JPMorgan caters to applicants with an intention to work at the frontline of community banking and commercial banking businesses while Morgan Stanley fits for those who are…
In response to Rip Curl’s inquiry to issue bonds in Switzerland, this report aims to cover the positive and negative aspects of such a solution and attempt to determine a solution that will be the most feasible.
Although the interest rates in Switzerland are relatively low compared to those in Australia, by issuing these bonds overseas, Rip Curl are inherently taking in risks associated with the market that may include:
- Foreign currency risk
- Inflation risk
By relying on the exchange rate…
As I was watching James Bond Series, I realized, do I know anything about the bonds? And then I admitted to myself that I do…technically yes!!!
Bond: Bond is investing in an entity/asset for a fixed period of time and obtaining additional income through it, like interest. They are one of the perfect ways to increase time value of money.
Time Value of Money: As and when the cost/ market value of a product increases the value of money decreases. But through investing money in the investment…
term and condition, provided the higher yield of the profit distribution and it was very liquid instruments (Brounen & Koning, 2012). Moreover, REITs is known as the investment that less risk compare to the stock and offer higher return compare to the bond. The tax-exempt that implemented in REITs would help the investors to invest with large capital and could diversify the investment portfolio plus the public market that was liquidity. This type of investment is suitable for who was looking for…
QUESTION (2): Explain why the costs of selling equity are so much larger than the costs of selling debt.
When a company requires raising capital for new investment, may has two real selections. Option one is to selling equity and option two is to selling debt from financial institutions (Stephen Ross, David Hillier, 2012).
The cost of selling equity is greater than the cost of selling debt because when the firm sells equity to individuals, because company and other…
This study attempts to address the issues, securities and circulation of money in pawnshops. What is pawnshop? According to Caskey and Zikmund (1990), ”Pawnshops are one of many financial institutions supplying consumer credit, yet they do not compete directly with other financial institution for customers”. It provides variety services such as credit system between the creditor and debtor, mortgage and even money exchange. There are two parties in pawnshops; the lender and the borrower.…
Fungible Treasury Bills (T-Bills)
Fungible Treasury Bills (T-Bills) are government short-term debt securities issued by way of invitation to tender. A fungible security can be issued, the first time, in form of a fixed size then subsequent issues are matched.
Every new security issued is attached to the previous with the same characteristics (nominal unit, maturity date, basis for interest calculation). Only rates and issuance dates change.
Fungibility increases the size of…
The term invest itself is related to allocating money in the expectation to get some benefit in the future. In finance, this benefit can also be called a return. It may consist of capital gain and/or investment income, including interest, dividends, rental income etc. Generally, investment results in acquiring an asset. In case the asset is available at a price worth investing, usually it is expected either to appreciate in value, or to generate income. Normally investors expect higher returns…
Value)/(Current Price of Bond)┤)^(1/(Years to Maturity))-1
a) r =├ ( $1000/$800┤)^(1/1)-1= 0.25 = 25%
b) r =├ ( $100/$950┤)^(1/1)-1= 0.053 = 5.3%
c) r =├ ( $1000/$1000┤)^(1/1)-1=0 = 0%
The yield to maturity may change over the years depending on the changes in the overall demand for bonds in the market. If the investors become more willing to hold bonds due to economic uncertainty, then the bond prices will rise which will reduce the yield (Ross, 2016). In this case, when the price of bond…