# Fight Finance

#### CoursesTagsRandomAllRecentScores

For a price of $95, Nicole will sell you a 10 year bond paying semi-annual coupons of 8% pa. The face value of the bond is$100. Other bonds with the same risk, maturity and coupon characteristics trade at a yield of 8% pa.

Would you like to the bond or politely ?

Find UniBar Corp's Cash Flow From Assets (CFFA), also known as Free Cash Flow to the Firm (FCFF), over the year ending 30th June 2013.

 UniBar Corp Income Statement for year ending 30th June 2013 $m Sales 80 COGS 40 Operating expense 15 Depreciation 10 Interest expense 5 Income before tax 10 Tax at 30% 3 Net income 7  UniBar Corp Balance Sheet as at 30th June 2013 2012$m $m Assets Current assets 120 90 PPE Cost 360 320 Accumul. depr. 40 30 Carrying amount 320 290 Total assets 440 380 Liabilities Current liabilities 110 60 Non-current liabilities 190 180 Owners' equity Retained earnings 95 95 Contributed equity 45 45 Total L and OE 440 380 Note: all figures are given in millions of dollars ($m).

The market expects the Reserve Bank of Australia (RBA) to decrease the policy rate by 25 basis points at their next meeting.

Then unexpectedly, the RBA announce that they will decrease the policy rate by 50 basis points due to fears of a recession and deflation.

What do you expect to happen to Australia's exchange rate? The Australian dollar will:

Some financially minded people insist on a prenuptial agreement before committing to marry their partner. This agreement states how the couple's assets should be divided in case they divorce. Prenuptial agreements are designed to give the richer partner more of the couples' assets if they divorce, thus maximising the richer partner's:

The first payment of a constant perpetual annual cash flow is received at time 5. Let this cash flow be $C_5$ and the required return be $r$.

So there will be equal annual cash flows at time 5, 6, 7 and so on forever, and all of the cash flows will be equal so $C_5 = C_6 = C_7 = ...$

When the perpetuity formula is used to value this stream of cash flows, it will give a value (V) at time:

The below screenshot of Commonwealth Bank of Australia's (CBA) details were taken from the Google Finance website on 7 Nov 2014. Some information has been deliberately blanked out.

What was CBA's approximate payout ratio over the 2014 financial year?

Note that the firm's interim and final dividends were $1.83 and$2.18 respectively over the 2014 financial year.

What is the present value of a nominal payment of $1,000 in 4 years? The nominal discount rate is 8% pa and the inflation rate is 2% pa. Convert a 10% continuously compounded annual rate $(r_\text{cc annual})$ into an effective annual rate $(r_\text{eff annual})$. The equivalent effective annual rate is: A non-dividend paying stock has a current price of$20.

The risk free rate is 5% pa given as a continuously compounded rate.

Options on the stock are currently priced at $5 for calls and$5.55 for puts where both options have a 2 year maturity and an exercise price of $24. You suspect that the call option contract is mis-priced and would like to conduct a risk-free arbitrage that requires zero capital. Which of the following steps about arbitraging the situation is NOT correct? Find the Macaulay duration of a 2 year 5% pa semi-annual fixed coupon bond which has a$100 face value and currently has a yield to maturity of 8% pa. The Macaulay duration is: