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St. Louis Bridge Co. has bonds issued that have 10 years to maturity and a coupon rate of 8.2%. The bonds make semi-annual payments. If the YTM of these bonds is 8.95%, what is the current bond pric
A preferred stock pays a dividend $2.50 annually. You judge that a return of 5.5% annually is required to invest in this preferred stock? What is the maximum you would pay for this preferred stock?
An 8-year corporate bind has a yield of 8.3%, which includes a liquidity premium of 0.75%. What is its default risk premium?
Compnay has capitla budget of 1,000,000. wants to keep target captial structure of 60% debt and 40% equity. Forecast net income of $600K. Copmnay wants to use residual divident policy. what is divid
A pawn shop will lend you $100 for 10 days at a cost of $5 interest. What is the effective rate of interest?
The annual return on the stock market during the past 3 years was 15.00%, but investors expect the annual future stock market return to be 13.00%. Based on the SML, what is the firm's required retur
The current price of a stock is $50, the annual risk-free rate is 6%, and a 1-year call option with a strike price of $55 sells for $7.20. What is the value of a put option, assuming the same strike
If the appropriate required rate of return for ADM's stock is 15 percent, what should be the price of the stock in one year, P-hat sub 1? Assume that the company has achieved constant growth.
Today the stock is selling at $63.37. If the required rate of return for such stocks is 15.5 percent, what is the quarterly dividend paid by this firm?
You are interested in buying the preferred stock of a bank that pays a dividend of $1.80 every quarter. If you discount such cash flows at 8 percent, what is the value of this stock?
Estimate the dividends for the next five years. Compute the present value of these dividends if the required rate of return is 14 percent.
The firm last paid a dividend of $3.56. If you require a rate of return of 13 percent, what is the current value of this stock to you?
You normally require a return of 14 percent on stocks of similar risk. Is the stock overpriced, underpriced, or correctly priced?
The process requires new machinery that would cost $1,968,450, have a life of five years, and would produce the cash flows shown in the following table. What is the NPV if the discount rate is 15
The company is not expected to increase its dividends for the next several years. If your required rate of return for such firms is 13 percent, what is the current value of this company"s stock?
If your required rate of return is 14 percent, what is the maximum price that you would be willing to pay for this company"s stock?
If you deposit $10,000 in a bank account that pays %10 interest annually, how much would be in your account after 5 years?
If the opportunity cost for an investor is 8.25 percent, what is the maximum price that she should be willing to pay for this bond?
Jackson corporations bonds have 12 yrs remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 8%.
Assume a required rate of return of 10 percent. Compute the expected dividends for the next three years and also the present value of these dividends.
Assume you are given the following relationships for the Brauer Corp.: Sales/total assets 1.5x; Return on assets (ROA) 3%; Return on equity (ROE) 5%. Calculate Brauer's profit margin and debt ratio
If the current market rate is 8.5 percent and the bonds make annual coupon payments, what is the current market value of one of these bonds?
The entire amount is invested at a rate of 10% and he ecpects to recieve 150 equal monthly payments. The first payment is expected in 2 years. Find the size of the payments.
Kim Sundaram recently bought a 20-year zero coupon bond that compounds interest semiannually. If the current market rate is 7.75 percent.
Fama's Llamas has a weighted average cost of capital of 9.8 percent. The company's cost of equity is 15 percent, and its cost of debt is 7.5 percent. The tax rate is 35 percent. What is Fama's debt