1. A company has earnings before interest and taxes of $671,551, a tax rate of 34%, interest expense of $107,393, and depreciation expense of $125,193. What is the company’s operating cash flow?
1. $568,417
2. $692,736
3. $618,741
4. $539,227
5. $485,789
2. A twelve-year corporate bond is yielding 4.8% per year and twelve-year Treasury bonds are yielding 4.2% per year. If the corporate bond’s yield includes a 0.2% per year liquidity premium and a 0.3% per year maturity premium, what is its default premium?
1) 0.5%
2) 0.3%
3) 0.4%
4) 0.6%
5) 0.2%