1. Company S and Company T combine to form a new Company ST by pooling all their assets and liabilities and issuing new ST shares to all shareholders in proportion to their previous shareholdings. How this transaction should be categorised? a) Merger b) Acquisition c) Spin-off d) De-merger

Q: Suppose you want to buy 10,000 shares of Ultra Universe Company at a price of 4.00. You put up P10,0...

A: Given: Short of shares = 10,000 Price =P4 Initial margin = 60% Amount invested = P10,000

Q: What is the difference between VaR as it has been traditionally measured and stressed VaR? Explain y...

A: Value at Risk is to Define as :- Value at risk (VaR) is a statistic that quantifies the extent of po...

Q: Mr. Tom promises to find a job for Mr. Martin in a public company. Mr. Martin promises to pay 1000 O...

A: A contract is a written or oral agreement with precise terms between two or more people or entities ...

Q: National Co. has outstanding bonds with an annual 8 percent coupon. The bonds have a par value of P1...

A: Par value = P1000 Coupon rate = 8% Annual coupon amount = 1000*0.08= P80 Years to maturity = 11 Year...

Q: On January 1, 200A, ABC Company sells to XYZ, a used transportation equipment, which was acquired at...

A: The promissory notes also known as the notes receivables are the fixed documents which shows the amo...

Q: A man bought a condominium unit worth ₱3.9M a pay a down payment of ₱1.5M and agreed to pay the rema...

A: Present value of future value of money to be received in future is value of money without the intere...

Q: Assume that ASX 300 Index represents the risky portfolio. Calculate the annual return for the period...

A: Annual return is a return percentage of profit or loss occurring in one year of holding period to th...

Q: Sara met with a financial planner and has determined that she will need $1,250,000 when she retires ...

A: Retirement amount needed (FV) = $1,250,000 n = 30 years = 360 months r = 5.65% per annum = 0.47083% ...

Q: Suppose that P 4500 is deposited each year into a bank account that pays 8% interest compounded quar...

A: When an amount is deposited in any account, it pays interest. A series of equal annual payments is c...

Q: National Inc. has 100 bonds outstanding with maturity value each of P1,000. The nominal required rat...

A: Par value of bond (FV) = P1000 Coupon rate = C Semi annual coupon amount (P) = 1000*C/2 = 500C Years...

Q: Find the amount of each note if annual interest is $16450

A: Note payable refers to those legal obligations of the company which will be paid on any specific fut...

Q: Bulldogs Inc. has sales of P4,500,000, variable costs equal 75% of sales, and a fixed interest costs...

A: Sales = P4,500,000 Variable cost = 75% Contribution = Sales*(1-Variable cost ratio)                 ...

Q: Please read the article and provide a one-paragraph comment on this article. To see how asset alloc...

A: Optimal asset allocation is no one-size-fits-all formula for the investor. Most financial specialist...

Q: In the spot market, P1 = 100 USD, 1 USD = 0.95 Yen, and 1 Yen = 5.50 British Pound.  What is the exc...

A: Cross exchange rate method is used when there is no direct quotation of currencies. Thereafter, with...

Q: 5. Portfolio Beta Portfolio beta can be computed in the same way as portfolio return was computed. I...

A: Beta is used in determining the risk premium to be expected from investment made in a asset because ...

Q: The Bulldogs Inc. bonds currently sell for P1,500 and the same bond was originally sold at P1,500. T...

A: Issue price = P1500 Current price = P1500 Annual coupon payment = P37.50

Q: Consider a plain vanilla interest-rate swap with an effective date of January 1 of year 1, notional ...

A: The current value of a projected sum of money or stream of cash flows with a predetermined rate of r...

Q: Which is not true about the Banko Sentral ng Pilipinas and the Philippine banking industry?   Banko ...

A: Bangko Sentral ng Pilipinas of the Philippines is responsible for the monetary policies, monetary op...

Q: Why dividen yield ratio increase while dividend payout ratio decrease? please explain in terms of in...

A: Dividend Yield ratio:               It is the ratio will be used to calculate the ratio of dividen...

Q: Sammie Jo wants to begin saving for her retirement in 35 years. She researched and found an annuity ...

A: The future value is equal to the sum of the future cash flows multiplied by the future value factor ...

Q: Today, $1 = 1.82 Euro and $1 = 130 Korean Won. In the 90-day forward market, $1 = 1.84 Euro and $1 =...

A: Acorxding to interest rate parity theory, the currency of a country which has higher interest rate w...

Q: National Co. is considering leasing or purchasing a small aircraft to transport executives between m...

A: Here, Cost of Debt is 7% Tax Rate is 40%

Q: The current zero-coupon yield curve for risk-free bonds is as follows What is the price per $100 fac...

A: Face Value = $100 Time period = 4 years  Zero coupon bond YTM of 4 years = 5.99%

Q: We have all heard of Return on Investment or (ROI). Please research and describe five other business...

A: To determine the success of a business plan and of the business that has been operational because of...

Q: An amount of ₱234,000 is deposited in a bank paying an annual interest rate of 6.15%, compounded con...

A: Solution:- Continuous compounding means that the interest is getting compounded every moment. Future...

Q: If you pay $1000 for a $1000 bond that pays annual “coupon interest” equal to 5% and matures in 3 ye...

A: Bond price implies for the consideration paid by an investor for acquiring bond. In provided case, b...

Q: Find the present value of an investment that is worth $19,513.75 after earning 3% simple interest fo...

A: Present Value: It represents the present worth of the future value of the amount and is computed by...

Q: ur uncle is trying to figure out how much he has to de today to pay for his son's undergraduate educ...

A: Effective interest rate is interest rate considering the impact of compounding and is more with more...

Q: Here is Miguel's credit card statement for the month of November. Transaction Date Transaction amoun...

A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for yo...

Q: Assume the spot Swiss franc is $0.7030 and the six-month forward rate is $0.7010. What is the Value ...

A: Here, Spot Price is $0.7030 Six Month Forward rate is $0.7010 Strike Price is $0.6830 Risk Free Rate...

Q: How does a bank try to achieve the best possible risk adjusted return on its overall loan portfolio?

A: The possibility of a loss arising from a borrower's inability to repay a loan or meet legally bindin...

Q: ge Bank has the following balance sheet (in millions) with the risk weights in parentheses. ...

A: Financial assets that do not display on a entity's statment of financial position are refer as off-b...

Q: BMW (Germany) owes FORD (US) $100 due in 1 year. The current spot is $1.2/€. BMW wants to use option...

A: Given: BMW owes = $100 Spot rate = $1.2 /€ Strike price on call = $1.1/€ Strike price on put =$1.05/...

Q: A contractual relationship in which an individual must act in the best interests of a principal when...

A: Solution:- Lease agreement is the agreement under which the owner of the asset (lessor) grants a rig...

Q: has accumulated $6200 by saving $116 every month for four years, what nominal annual rate of interes...

A: The amount deposited in account grow to large amount after deposits are made for long time with effe...

Q: TOPIC: ENGINEERING ECONOMICS SPECIFIC INSTRUCTION: Solve each problem NEATLY and SYSTEMATICALLY. Sho...

A: Solution:- When money is invested somewhere, it earns interest and the maturity value at end includi...

Q: Consider 10.0 percent Swiss franc/U.S. dollar dual-currency bonds that pay $666.67 at maturity per S...

A: Implicit exchange rate = Swiss franc/U.S. dollar dual-currency bonds 

Q: You think you will be able to deposit $4,000 at the end of each of the next three years in a bank ac...

A: Annuity  An annuity is the series of payments which is received or paid for a certain period of time...

Q: The following data are gathered for: · The real risk-free rate is 1.25% · Inflation premium is const...

A: Real risk free rate = 1.25% Inflation premium = 2.50% Default risk premium = 5% Liquidity premium = ...

Q: Red Company financing has a total assets of P500,000 and total liabilities of P300,000 at the end of...

A: The company has limited liability which means the shareholders are liable to the extent of contribut...

Q: Just in preparation for his retirement, a man intended to invest today into a bank with an interest ...

A: Nominal interest rate is interest without considering the impact of the compounding and is less annu...

Q: Red Company has total interest charges of $10,000 per year, sales of $1 million, a tax rate of 40 pe...

A: Interest expenses = $10,000 Sales = $1,000,000 Tax rate = 40% Net profit ratio = 6% Profit before ta...

Q: True or False. 1. Allocating funds is the same as the actual distribution of funds 2. Utilization ...

A: Finance is the blood of the business. Without funds, no business can survive in this competitive wor...

Q: Bulldogs Inc.’s capital structure consists entirely of long-term debt and common equity. The cost of...

A: Weighted average cost of capital is the average of the various cost of capital based on the weights ...

Q: An individual makes five deposits that increase uniformly by Php. 300.00 every month in a saving acc...

A: Number of deposits = 5 Annual increase in deposits = Php 300.00 First deposit = Php. 4500.00 Interes...

Q: Arnold Inc. is considering a proposal to manufacture​ high-end protein bars used as food supplements...

A: Here, Cost of Equipment is $1,500,000 Sale Value of Equipment in Year 8 is $432,000 Net Working Capi...

Q: Consider the two risky investments below: Scenario Asset 1 Asset 2 Probability | Returns 0.1 Probabi...

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one...

Q: A firm has experienced a constant annual rate of dividend growth of 3 percent on its common stock an...

A: The value of stock can be computed by using the dividend growth model

Q: Yield to maturity (YTM) is the rate of return expected from a bond held until its maturity date. How...

A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only on...

Q: 10. Ruel Dayrit deposited P80,250 in a bank paying 5% simple interest for 4 years. How would he have...

A: Simple Interest: Interest on loan/investment is calculated using simple interest method and is  calc...