devry fin515 week 2 and week 5 quiz latest 2016

(TCO B) Your daughter has just given birth to your first grandchild. You decide to start a college fund for the child. You want the fund to have $300,000 in it when the child turns 18. You think you can get a return of 10% per year on your investment. How much should you deposit in the fund? Ignore taxes. Show your work. If you use Excel, show the formula with the parameters, and the answer. If you use a formula, provide the standard formula, the formula with terms substituted, and the answer. If you use a calculator, show the inputs and the answer. Question 2. Question : (TCO B) You want to buy a car. To do so, you will need to take out a loan in the amount of $22,000. The longest that you are willing to pay on the loan is 5 years. The interest rate on this type of loan is 5.0% per year. How much will the equal monthly payments be? Ignore taxes. Show your work. If you use Excel, show the formula with the parameters and the answer. If you use a formula, provide the standard formula, the formula with terms substituted, and the answer. If you use a calculator, show the inputs and the answer. Question 3. Question : (TCO B) You have been diligently saving to buy a boat. For the last 10 years, you have been putting $50 per month into a secret savings account paying .5% interest per year. You started with $0. You just discovered that your spouse knew about the account the whole time and has been withdrawing $45 each month for the last 10 years. How much money do you have in the account?   Ignore taxes. Show your work. If you use Excel, show the formula with the parameters and the answer. If you use a formula, provide the standard formula, the formula with terms substituted, and the answer. If you use a calculator, show the inputs and the answer. Week 5 Question 1. Question : (TCO D) Your stock portfolio consists of only two stocks. You have $30,000 in Company A and $35,000 in Company B. Company A has an actual return of -8% and Company B has a return of 12%. What is the return on your portfolio? Show your work. Question 2. Question : (TCO D) Company A has a beta of 2.77. Company B has a beta of .73. Company C has a beta of .90. The risk-free rate is 6%, and the market-risk premium is 4%. What is the expected return of investing in Company C? Show your work. : Question 3. Question : (TCO D) A company has a capital structure of 40% debt and 60% equity. The YTM on the company’s bonds is 9%, and the company’s effective tax rate is 40%. The CFO has estimated the company’s WACC to be 9.96%. What is the company’s cost of equity? Show your work.

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