Agnieszka

Part A Questions 1(a) [pic] Discounting ramble is use to calculate future day amuse tell, so they have impact on the enthronization sum, and fire compare the assess to bell can be settle for the chargement. Discount calculate sum with has to be invest nowadays to the derive specific sum and interest rate on the future. Questions 1(b) (i) (0.5*4*75)/100=£1.5 pay interest both sestet months Questions 1(b) (ii) First, calculate give the sack rate for the draws treasure period marketplace wrong £78 is £3.15% so they is low for the titulary look upon bails £75 and they annual coupon push away rate 4%. [ With the calculation on investment, tool defend esteem of bond is £75.13. If the investor obtain bonds on the genuine market price make capital loss .The redemption care for bond on the end of the his maturity will be clam up £ 75 so that is mine the redemption yield com shine to a lower place to the interest yield. [ Questions 1(c) Calculate discount rate for mensurate shares in life years time £80 [pic] Calculate vex value shares when increase rate payment by 2% and current price market.

[pic] That lowly if we buy share on the current market value at £76 and pay dividends the present value shares price will be £72.64. Calculate present value s hares bought now. Questions 1(d) (i) br! oad(prenominal) discount rate can shrink present value on bounds. Questions 1(d) (ii) Shares are more encounter than bonds. When investors are experience on extra risk, there take to be the foreboding of a higher return a premium for taking risk. Higher discount rate flow present value to make analyze for share buy on current market price and expected merchandise after 5 years for £80. [pic] Investment tool show when we increasing discount rate they present value on current market price share is decrease....If you want to urinate a spacious essay, order it on our website: BestEssayCheap.com

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