FIN 401 Study Guide - Final Guide: Tax Shield, Loonie, Net Present Value

• School: Ryerson University
• Department: Finance
• Course: FIN 401
• Professor: Scott Anderson

Document Summary

Solution: n = 5, i = 10% x (1 0. 4) = 6%, pmt = 1. 5m x (1 0. 4) = 900,000. Which of the following components of the nal formula would be affected: the present value of the lease payments. A financial lease increases the total debt of a firm. Suppose that an investor in pvmt wanted to smooth out these dividends and would like to generate equal dividends in each period. Solution: n = 2, i = 12%, pv = - Solution: the investor wants equal payments each year of . 7924 per share (see answer to previous question), for a total of . 62 on the 50 shares. (50 shares * dividend) at the end of the first year, leaving a shortfall of . 62. A lease is considered to be a capital lease if which of the following criteria hold: the lease term is for 75% or more of the life of the asset.