Balance Sheet vertical Analysis: Costco’s long-term debt was 5.1% of their original asset in 2012; it is increased to 14.5% of their total assets in 2015. During the past four years, Costco Wholesale Corporation had a 9% increase in their long-term debt as shown on the vertical analysis of the balance sheet. There are few main causes to this change. Firstly, In December 2012, Costco issued $3,500 million of Senior Notes to fund the business, these notes are payable in 2015 2017, and 2019. Secondly, the Japanese Costco Subsidiary issued approximately $102 million of promissory notes with 1.05% interest that is due in May 2023, then the same subsidiary got an approximately $102 three-year term loan in July of 2013, which bears an interest
Leela Crosby and Alysha Shroff I did the questions and Alysha did the vocabulary ACTIVITY 1 Bond- a certificate issued by a government or a public company promising to repay borrowed money at a fixed rate of interest at a specified time. Capital Gains- a profit from the sale of property or of an investment. Capital Goods- goods that are used in producing other goods, rather than being bought by consumers. Capital Loss- is the result of selling an investment at less than the purchase price or adjusted basis. Common Stock- shares entitling their holder to dividends that vary in amount and may even be missed, depending on the fortunes of the company.
401(k) and IRA accounts have their tax liability paid at the time the money is withdrawn out of the account. Make sure that this is the correct type of investment option for the individual’s current situation. After retirement, many individual’s tax situation will change, and the tax rate for withdrawals will be determined based off of their current taxable
What would the balance be after 6 years in the bank. A)$103 B)Less than $103 C) do not know This next question is according to money.usnew.co is one of the most basic questions about fiance. 2. Imagine that the interest rate on your savings account is 1 percent per year and inflation is 2 percent per year. After one year, would
Be explicit and explain to the CFO how financial markets differ from markets for physical assets and why that difference matters to Jagdambay Exports. 2. Explain the relevance of money markets and capital markets for Jagdambay Exports. 3. Analyze Jagdambay exports and advise how the CFO should consider the primary market and secondary market in the expected transaction.
The time value of money tells us that the part of the $100 is interest, which is for waiting one year for the $100. Only $91 of the $100 is service revenue made in 2011, of that only $9 is interest earned in 2012. The calculation of present value will remove the interest, so that the amount of the service revenue can be determined. Another example might involve the purchase of land: the owners will either sell it to for $160,000 if he receives the money today, or for $200,000 if paid at the end of two years. At the end of two years, he would have earned interest for two years on the amount had he received it today.”
5. How would Fuzzy Monkey’s 2011 statement of cash flows be affected by the investment? Date Requirement Descriptions Amount in millions January 1, 2011 1 Investments in bonds (face amount) $80 Discount on bond investment (difference) $14 Cash (price of bond) $66 January 30, 2011 2 Cash (4%×$80 million) $3.20 Discount on bond investment (difference)
When taking the $40 million debt and $100 million cash buyout of stocks into account, cost of debt is now a factor. Cost of debt was 5.88%, the bond rating of a AAA rated company like we assume Blaine
Catastrophe bonds, which were developed in the mid 1990s, are risk-linked securities issued by insurance or reinsurance companies. The return an investor receives from holding these bonds is linked to the incidence of a pre-specified catastrophe within a particular time period. The occurrence of the catastrophic event triggers the loss of the investor’s principal, which passes to the insurance company and helps them pay claims arising in the aftermath of the disaster. On the other hand, if the insured event fails to take place within the predetermined period (a more likely scenario) the investor earns a good return on their bond – usually between 8% and 15%. Catastrophe bonds can be designed to cover any natural disaster.
Managers consider ways to reduce volatility by either diversifying or hedging positions across industries and regions and hedging non-diversifiable market risk. However, the overall risk in this strategy is determined by whether a manager is attempting to prioritize returns (by having more concentration and leverage) or low risk (by creating lower volatility through diversification, lower leverage, and hedging). The core rationale of a long/short strategy is to shift principal risk from market risk to manager risk, which requires skilled stock
As a result of the lease, the company will be assessed an annual VAT amount of $ 93K on the annual lease payment. Additionally, St. John Mexico’s minimal taxable income will be increased by 44K due to the increase in the operating expense as a result of the inclusion of the rent expense. Consequently, St. John Mexico will incur an additional income tax liability of $13K. 3. Generally, Mexico imposes a 10% withholding tax on dividends paid to foreign parents.
Derivatives Assignment ‘Option, Futures and Forwards’ October 2015 Instructor: Jacques Bernard Done by: Zainab Yehia Bakr i. Explain the difference between selling a call option and buying a put option. Selling a call option is when you give the other party the right to buy an underlying asset at an agreed upon price ‘strike price’ on an agreed upon date. When you write a call option, you have the obligation to sell the underlying asset to the counterparty, and the counterparty chooses whether to exercise the contract or not, your payoff would be either negative or zero, in other words, It gives you a payoff of: -Max(St –K,0) = Min(K -St,0) Buying a put option is when you buy the right to sell an underlying asset
Broker wants you to use the money invested in the Certificate of Deposit to purchase tax-exempt municipal bonds. If you decide to take Mr. Brokers advise you will be faced with a situation similar to the taxpayer, Bishop, in the case that you are continuing the indebtedness to purchase state and municipal bonds which leads me to believe that court would disallow
The question is; which option should I choose? The value of each alternative is revealed by using the present value concept for cash, as well as, for an annuity. Additionally; the current interest rate, number of payment years, and, the future value of cash payments, are considerations used in the calculation. Therefore, we assume a current interest rate of 7%; and use the table in Appendix A of the textbook, “Financial Accounting” (Duchac, Reeve, Warren, 2014), to compute the results for each option. Ultimately; the selection that provides the most financial security, is the best choice.
Another new rule is the stress test. It applies not only to banks but also for any large hedge fund that is considered a systematically significant nonbank financial company (SSNF). The SEC examiners want to understand how the firm communicates investment values and handles liquidations because during the financial crisis we know that large financial institutions faced a critical sell-off or liquidity. It is important that the firm complies with contingent capital requirements and tighter risk management models. If for example the firm trades swaps, the SEC wants to see that the firm has made risk adjustments for clearing