# Fight Finance

#### CoursesTagsRandomAllRecentScores

Which statement is the most correct?

Stock A and B's returns have a correlation of 0.3. Which statement is NOT correct?

A four year bond has a face value of $100, a yield of 9% and a fixed coupon rate of 6%, paid semi-annually. What is its price? You just started work at your new job which pays$48,000 per year.

The human resources department have given you the option of being paid at the end of every week or every month.

Assume that there are 4 weeks per month, 12 months per year and 48 weeks per year.

Bank interest rates are 12% pa given as an APR compounding per month.

What is the dollar gain over one year, as a net present value, of being paid every week rather than every month?

Two years ago Fred bought a house for $300,000. Now it's worth$500,000, based on recent similar sales in the area.

Fred's residential property has an expected total return of 8% pa.

He rents his house out for $2,000 per month, paid in advance. Every 12 months he plans to increase the rental payments. The present value of 12 months of rental payments is$23,173.86.

The future value of 12 months of rental payments one year ahead is 25,027.77. What is the expected annual growth rate of the rental payments? In other words, by what percentage increase will Fred have to raise the monthly rent by each year to sustain the expected annual total return of 8%? One formula for calculating a levered firm's free cash flow (FFCF, or CFFA) is to use earnings before interest and tax (EBIT). \begin{aligned} FFCF &= (EBIT)(1-t_c) + Depr - CapEx -\Delta NWC + IntExp.t_c \\ &= (Rev - COGS - Depr - FC)(1-t_c) + Depr - CapEx -\Delta NWC + IntExp.t_c \\ \end{aligned} \\ Does this annual FFCF or the annual interest tax shield? According to option theory, it's rational for students to submit their assignments as or as possible? 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 backwards-looking price-earnings ratio? An investor bought a 5 year government bond with a 2% pa coupon rate at par. Coupons are paid semi-annually. The face value is100.

Calculate the bond's new price 8 months later after yields have increased to 3% pa. Note that both yields are given as APR's compounding semi-annually. Assume that the yield curve was flat before the change in yields, and remained flat afterwards as well.

A firm wishes to raise $30 million now. The firm's current market value of equity is$60m and the market price per share is $20. They estimate that they'll be able to issue shares in a rights issue at a subscription price of$15. Ignore the time value of money and assume that all shareholders exercise their rights. Which of the following statements is NOT correct?