The current share price of Lane Co is $3·60 per share and future share price growth is expected to be 5% per year.
The before-tax cost of debt of these loan notes is 10% and corporation tax is 30%. What is the current market value of a Lane Co convertible loan note?
A. $82·71
B. $73·47
C. $67·26
D. $94·20
查看答案
Which of the following government actions would lead to an increase in aggregate demand?
(1) Increasing taxation and keeping government expenditure the same
(2) Decreasing taxation and increasing government expenditure
(3) Decreasing money supply
(4) Decreasing interest rates
A. 1 only
B. 1 and 3
C. 2 and 4 only
D. 2, 3 and 4
What is the theoretical value of a right per existing share?
A. $1·60
B. $0·40
C. $0·50
D. $1·50
Country X uses the dollar as its currency and country Y uses the dinar.
Country X’s expected inflation rate is 5% per year, compared to 2% per year in country Y. Country Y’s nominal interest rate is 4% per year and the current spot exchange rate between the two countries is 1·5000 dinar per $1.
According to the four-way equivalence model, which of the following statements is/are true?
(1) Country X’s nominal interest rate should be 7·06% per year
(2) The future (expected) spot rate after one year should be 1·4571 dinar per $1
(3) Country X’s real interest rate should be higher than that of country Y
A. 1 only
B. 1 and 2 only
C. 2 and 3 only
D. 1, 2 and 3
Peach Co’s latest results are as follows:
In addition, extracts from its latest statement of financial position are as follows:
What is Peach Co’s return on capital employed (ROCE)?
A. 14%
B. 18%
C. 20%
D. 25%