AirJet Best Parts Coursework example
High school
Coursework
Finance & Accounting
Pages 6 (1506 words)
Download 0
Task 1: Assessing loan options for AirJet Best Parts, Inc. 1. Prime rate is 3.25% Bank APR No. of times compounded National First 3.25%+6.75%=10% Semiannually Regions Best 13.17% Monthly For National Bank the effective annual rate would be: For Regions Best, the effective annual rate would be: 2…

Introduction

The interest payments would be lower with National First. Hence, the loan should be taken from them. 3. The interest payment that AirJet Best Parts Inc. has to make is: Yes, I agree with the decision as the effective annual interest rate is lower than National First. The interest payment till the end of the term would be lower in comparison to the deal offered by National First. Task 2: Evaluating Competitor’s Stock 1. Rate of return is calculated for Raytheon Boeing and dividend stated is annualized. Price of Raytheon Boeing’s share is $65.38 and Dividend annualized is $1.68 which is given out quarterly as $0.42/share. 2. g=1% r=7.7% D=$1.5 3. Common stock will have a higher price than preferred stock because preferred stock pays a fixed dividend and tend to fluctuate in price far less than common shares. This means that preferred stock is comparatively less risky than common share therefore; the return offered on it will automatically be lower as compared to common shares. Common stock on the other hand, is entitled to high variance in price which means that it carries higher risk than preferred shares. Therefore, a common stock holder will demand a higher return to accept the given risk in the stock. Another reason of higher price for a common stock is the dividend growth. ...
Download paper
Not exactly what you need?

Related papers

Best Self Exercise
I remember one time when I graduated high school and about to enter college, my parents strongly suggested that I go to the university near our community because it was easy to access and most of my friends were already enrolled in that university. However, my goal was already set and I was determined to go to a different university my parents opposed to. I wanted to go to a different university…
AirJet Best Parts
This increases your positive cash flows for the project and ultimately resulting in higher NPV. A company which opts for incremental method of depreciation will have higher cash flows in the initial years and it will reduce by the time it reaches its expiry. On the other hand, a company which opts for straight line method will have equal positive cash flows every year. Lastly, Depreciation of…
Capital Budgeting for a New Machine
Secondly, internal rate of return for a project provides a percentage of the amount of return that the cash flows will generate. It is noted that the required rate of return is 15% however; the return for this project is 22% which provides a 7% spread. These two ground are enough to take up this project. 4. Explain how depreciation will affect the present value of the project. (10 pts)…
Concepts Learned to a Real-life Simulation Experience
Now, on the right hand side of the equation, ‘e’ is taken as the number of times the interest is compounded. Now if we substitute the values in the equation we can get the following results. National First   Prime Rate 3.25% Floor Rate 6.75% Number of times compounded Semiannually i 0.1 e 2 a 10.25% Regions Best   Prime Rate 13.17% Number of times compounded Monthly i 13.17% e 12 a 13.99%…
"In finance, risk is best judged in a portfolio context." Is this true? Why
In such a case, if one project fails, the amount lost will be partially covered by the other project that succeeds. That way, one avoids losing all his or her money in one project. Investing in several projects to reduce the level of risk is referred to as spreading portfolio. Therefore, the term portfolio can be defined as a collection of investments that are held by an individual or by a company…
"In finance, risk is best judged in a portfolio context." Is this true? Why?
The giant players of this sector, the business are generated by management of the funds of the High Net-worth Individuals [HNI] clients and the big Corporate Houses. The services are obviously for a pre-determined fee which is generally structured on the basis of the returns generated by the investment bankers. In most common cases, there is a fixed portion of fee as well irrespective of the…
case: Best Buy
To achieve this, an organization needs to understand their market environment, capitalize on their strengths to overcome business threats and weakness and take and take advantage of any opportunities that arise in the market. Below is a case analysis of Best Buy Company Inc and suggestion of new strategies that this firm can employ to remain profitable and successful. Roy (2011) recognizes the…