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    This document contains a student's quiz answers. Question 1 discusses various options for a company named Carson Inc. to obtain funding, including loans from commercial banks, issuing new stock or bonds, or getting advisory services or underwriting from security firms. Question 2 provides the values for present value (PV), number of periods (N), payment amount (PMT), and future value (FV) in a bond pricing problem, and calculates the yield-to-maturity (YTM) as 9.51% using a financial calculator.

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    This document contains a student's quiz answers. Question 1 discusses various options for a company named Carson Inc. to obtain funding, including loans from commercial banks, issuing new stock or bonds, or getting advisory services or underwriting from security firms. Question 2 provides the values for present value (PV), number of periods (N), payment amount (PMT), and future value (FV) in a bond pricing problem, and calculates the yield-to-maturity (YTM) as 9.51% using a financial calculator.

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    9 views1 page

    18u00084 507 181924 5926

    Uploaded by

    Nobody NOBODY
    This document contains a student's quiz answers. Question 1 discusses various options for a company named Carson Inc. to obtain funding, including loans from commercial banks, issuing new stock or bonds, or getting advisory services or underwriting from security firms. Question 2 provides the values for present value (PV), number of periods (N), payment amount (PMT), and future value (FV) in a bond pricing problem, and calculates the yield-to-maturity (YTM) as 9.51% using a financial calculator.

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    of 1

    Quiz 1

    Mughees Hayat

    Section F

    18U00084

    Question 1

    (a) Commercial banks can only help by giving loans to Carson Inc which will enable them to carry
    out as well as expand its operations.
    (b) Carson may have already borrowed up to its capacity. Financial institutions may be unwilling to
    lend more funds to Carson if it has too much debt.
    (c) Security firms have two ways. Either they can advise Carson on its acquisitions. In addition, they
    could underwrite stock offering or a bond offering by Carson.
    (d) Carson Inc has the option of issuing new stock or bonds to obtain funds.

    Question 2

    YTM (rd) = 9.51%

    PV = $975

    N=7

    PMT = $90

    FV= $1,000

    Calculator working: We can find the YTM by solving for I/Y. Enter 7 into N, -975 into PV, 90 into
    PMT, and 1,000 into FV. Cpt+I/Y will give us YTM as 4.75%.

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