Problem 8.05 – Chrysler​ LLC
Multinational Business Finance
Eiteman, Stonehill, and Moffett
15th Edition
Determine the gain or loss on the interest rate futures.
Determine the gain or loss on the interest rate futures.
Given 3 years worth of cash flows, you are asked to determine the IRR of the project. Then, once given a required return in the second part of the problem, you are asked to determine whether the firm should accept or reject the project.
Given a company’s current stock price, required return, and a policy to maintain a constant growth rate in dividends, determine the current dividend per share when the total return on the stock is evenly divided between a capital gains yield and a dividend yield. Find the current dividend per share.
Given that the firm must pay float-rate interest and it wishes to lock in interest rate payments using interest rate futures, determine the gain or loss on the position at various possible floating interest rates.
Given three years of cash flows, you are asked to determine the NPV of the project twice given two different required returns.
Determine the savings or costs for the swap given that LIBOR rises or falls by various basis points.
Given probability distributions for two stocks A and B… calculate the expected rate of return, standard deviation, and coefficient of variation.
Given probability distributions for two stocks A and B… calculate the expected rate of return, standard deviation, and coefficient of variation.
Calculate the annual payment for a loan with a fixed maturity for a sovereign borrower, taking into account an amortizing structure. Consider the impact of negotiating for various interest rates given by international banks.
Determine the NPV of the project at two different required returns, and then for part c, determine the discount rate where you would be indifferent between accepting the project.