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Florida Sun, Inc. has a 5%, semiannual coupon bond with a current market price of $988.52. The bond has a par value of $1,000 and a yield to maturity of 5.29%.
What is the present value of a $100 perpetuity if the interest rate is 7%? If interest rates doubled to 14%, what would its present value be?
You borrow $85,000;the annual loan payments are $8,273.59 for 30 years. What interest rate are you being charged?
If the discount rate is 7 percent compounded monthly, what is the value of this annuity 6 years from now? What is the current value of the annuity?
Why does this accounting principle cause difficulties in financial statement analysis? Is there a solution that you feel would work?
Taggart Inc.'s stock has a 50% chance of producing a 25% return, a 30% chance of producing a 10% return, and a 20% chance of producing a -28% return. What is the firm's expected rate of return? What
What was the average real risk-free rate over this time period? What was the average real risk premium?
Valerie bought 200 shares of Able stock today. Able stock has been trading for some time on the NYSE. Valerie's purchase occurred in which market?
Lucas has 5 million shares outstanding, and the current price of Lucas shares is $30 per share. What is the payout ratio?
Technical Sales, Inc. has 6.6 percent coupon bonds on the market with 9 years left to maturity. The bonds make semiannual payments and currently sell for 92.5 percent of par. What is the effective a
Mirrlees Furniture earned $500,000 last year and had a 40 percent payout ratio. How much did the firm add to its retained earnings?
If the appropriate interest rate is 5.18 percent, what is the future value of these investment cash flows six years from today?
Todd and Cathy created a firm that is a separate legal entity and will share ownership of that firm on a 50/50 basis. Which type of entity did they create if they have no personal liability for the
Its investment banker has informed the firm that the retail price will be $22 per share, and that the firm will receive $19 per share. Out-of-pocket costs are $100,000. How many shares must be so
The Solar Calculator Company proposes to invest $5 million in a new calculator-making plant that will depreciate on a straight-line basis. Fixed costs are $2 million per year. A calculator costs $5
Sorenson corp.'s expected year-end dividend is d1= 4.00, its required return is rs=11%, its dividend yield is 6%, and its growth rate is expected to be constant in the future. What is sorenson's exp
The insurance company recovered $8,000. Describe how the recovered amount would be distributed between the parties involved.
Summer Tyme, Inc., is considering a new 5-year expansion project that requires an initial fixed asset investment of $1.296 million. The fixed asset will be depreciated straight-line to zero over its
The new bonds will be issued for 8%. The corporation's tax rate is 35%. The call premium is 9%. What is the net cost of the call premium?
Stock Y has a beta of 1.4 and an expected return of 15.2 percent. Stock Z has a beta of 0.7 and an expected return of 9.1 percent. What would the risk-free rate have to be for the two stocks to be c
A stock's expected dividend payment at the end of the year (d1) is $1. The required rate of return is r(s)= 11%, and the growth rate of the dividend is constant at 5%. What is the current stock pric
Which of the following would, generally, indicate an improvement in a company's financial position, holding other things constant?
Mary deposits $6000 into an account at the end each quarter. If the account earns 10.1 percent per year compounded monthly, what would the balance be after 4 years?
You own a stock portfolio invested 40 percent in Stock Q, 25 percent in Stock R, 25 percent in Stock S, and 10 percent in Stock T. The betas for these four stocks are 0.78, 1.16, 1.17, and 1.34, re
The amount is to be paid out at the rate of $20,000 a year for the next 50 years. With a discount rate of 10%, what is the present value of your prize?