You have to calculate net income using the the retained earnings from 2014 and 2015.
End retained earnings = Beginning retained earnings + net income - dividends
23.150 = 12.968 + net income - 0
Net income = 10.182
The sentence with the 8% is not relevant for the exercise. What you should remember is that the YTM is the IRR of the bond. You purchased the bond at par, hence the YTM is equal to the annual coupon rate, which is equal to 6%. Then, your IRR is equal to 6%
Short 5000 in XYZ and invest it in rf. Also invest 10000 in rf. Hence, total investment in rf : 15000
Total investment in XYZ : -5000
Then the weight in rf : 1.5
weight in XYZ : -0.5
Return XYZ : (29+1-25)/25 = 20%
Return rf: 5%
Portfolio return : -0.5 * (20%)+ 1.5*(5%) = -2.5%
=> ANSWER A
You first need to convert the 202 000 euro to dollars, by dividing it by 0.75. This gives you a cash flow of 269 333.33 dollars. Next, plug it in the NPV formula: -250 000 + (269 333,33 (1.07^1)). This gives you 1713 dollars. Because the NPV is positive, the student should take the project
WHAT'S UP WITH THATKARMA?