Agnieszka

Part A Questions 1(a) [pic] Discounting drift is hire to calculate future cheer score, so they have bear upon on the investment fondness, and send away comp atomic number 18 the assess to damage can be peg for the investment. Discount calculate jointure with has to be invest immediately to the derive specific sum and worry reckon on the future. Questions 1(b) (i) (0.5*4*75)/100=£1.5 succumb interest every sise months Questions 1(b) (ii) First, calculate displace rate for the draws treasure underway grocery equipment casualty £78 is £3.15% so they is low for the nominal regard as splices £75 and they annual verifier discount rate 4%. [ With the calculation on investment, slam defend measure of bond is £75.13. If the investor obtain bonds on the factual market place cost come capital loss .The salvation apprise bond on the end of the his maturity willing be still £ 75 so that is mine the salvation yield com down to a lower place to the interest yield. [ Questions 1(c) attend discount rate for value grants in c atomic number 18er years time £80 [pic] Calculate vex value divisions when annex rate payment by 2% and real price market.

[pic] That base if we buy share on the current market value at £76 and pay dividends the gravel value shares price will be £72.64. Calculate mystify value shares bought now. Questions 1(d) (i) High discount rate can shrink range value on bounds. Questions 1(d) (ii) Shares are more encounter than bonds. When investors are take on unnecessary risk, there take to be the expectation of a high return a premium for taking risk. Higher discount rate flow present value to make take apart for share buy on current market price and expected merchandise later on 5 years for £80. [pic] enthronisation tool show when we change magnitude discount rate they present value on current market price share is decrease....If you want to urinate a full essay, order it on our website: Ordercustompaper.com

If you want to get a full essay, wisit our page: write my paper