Business Finance Help for College and University Students

Forward Contract Delivery

A company that is uncertain about the exact date when it will pay or receive a foreign currency may try to negotiate with its bank a forward contract that specifies a period during which delivery can be made. The company wants to reserve the right to choose the exact date to fit in with its own cash flows. Put yourself in the po ...continues

Call/Put Options, Net Present Value, Put-call parity

1. Applied Materials' long-term call options with a maturity of two years and an exercise price of $30 are selling for $3. AMAT's current stock price is $20 and it not expected to pay a cash dividend over the next two years. Assume an annual risk-free rate of 1.5 percent. (a) Is the call option in or out of the money? (b) Wh ...continues

Option Pricing: Suppose that C1, C2 and C3 are the prices of European call options with strike prices X1, X2 and X3, respectively, where X3>X2>X1 and X3-X2=X2-X1. All options have the same maturity. Show that C2 is less than or equal to 0.5(C1+C3)

Suppose that c1, c2 and c3 are the prices of European call options with strike prices X1, X2 and X3, respectively, where X3>X2>X1 and X3-X2=X2-X1. All options have the same maturity. Show that C2 is less than or equal to 0.5(C1+C3) (Hint: Consider a portfolio that is long one option with strike price X1, long one option w ...continues

Calculation of Internal rate of return (IRR)

'Using the GEICO dividend Payment history in Exhibit 8 of the case, calculate the IRR on Berkshire's $45.7M investment in GEICO (assuming it was all)in 1976 which grew in value to $1.909 billion by 1994.' I'd like a detailed explanation of how to make the calculation with an example using very similar (or preferably the same) ...continues

Critique of Warren Buffett's investment philosophy

Critically assess the eight major elements of Buffett's investment philosophy and explain where you gree and disagree with them.

Stock price valuation and Warren Buffett's investment techniques

I am required to answer the following question as part of a case study on Warren Buffett's investment techniques. It relates to a case study which is attached. It is at post graduate level. I would appreciate receiving a draft answer What is the possible meaning of the changes in stock price for GEICO and Berkshire Hathawa ...continues

find interest payment

To purchase a product, the total price comes to $11,425. I will borrow the money for five years at 8.2% interest compounded annually.That will result in monthly payments of $282.38 each. How much interest will I pay over the life of the loan?

Stock price valuation/IRR question

I would like to receive a draft response to the following question which relates to the attached case study. Please show formula and calculation in response. 'Note the Value Line forecast of dividends (on P20). Value Line's forecasts of a share price of $90 at the low end of the range and $125 at the high end of the range at ...continues

Stock price valuation/analysis Case Study 2: Warren E. Buffett, 1995

What is the possible meaning of the changes in stock prices for GEICO and Berkshire Hathaway on the day of the acquisition announcement? Specifically what does the $718million gain in Berkshire's market value of equity imply about the intrinsic value of GEICO? Determine the implied mispricing per GEICO share. (Note for simpli ...continues

finance

find the Financial exchange rate exposure and management strategies