Reference no: EM133072265

1) Since your first? birthday, your grandparents have been depositing $1,000 into a savings account on every one of your birthdays. The account pays 9?% interest annually. Immediately after your grandparents make the deposit on your 18th? birthday, the amount of money in your savings account will be closest? to:

A. $24,780.80

B. $41,301.34

C. 57,821.88

D. $49,561.61

2) A bank offers a home buyer a 30?-year loan at 9?% per year. If the home buyer borrows $100,000 from the? bank, how much must be repaid every? year?

A. $15,573.82

B. $13,627.10

C. $9,733.64

D. $11,680.37

3) Aaron Inc. has 321 million shares outstanding. It expects earnings at the end of the year to be $566 million. The? firm's equity cost of capital is 12?%. Aaron pays out? 50% of its earnings in? total: 30% paid out as dividends and? 20% used to repurchase shares. If? Aaron's earnings are expected to grow at a constant 6?% per? year, what is? Aaron's share? price?

A. $22.04

B. $29.38

C. $14.69

D. $7.35

4) A homeowner in a sunny climate has the opportunity to install a solar water heater in his home for a cost of $2,700. After installation the solar water heater will produce a small amount of hot water every? day, forever, and will require no maintenance. How much must the homeowner save on water heating costs every year if this is to be a sound? investment? (The interest rate is 5?% per? year.)

A. $135

B. $165

C. $150

D. $180

5) The Sisyphean Company has a bond outstanding with a face value of $1,000 that reaches maturity in 9 years. The bond certificate indicates that the stated coupon rate for this bond is 8.4?% and that the coupon payments are to be made semiannually. Assuming the appropriate YTM on the Sisyphean bond is 9.3?%, then the price that this bond trades for will be closest? to:

A. $1,135

B. $1,324

C. $757

D. $946

6) Luther Industries has a dividend yield of 4.5?% and a cost of equity capital of 10?%. Luther? Industries' dividends are expected to grow at a constant rate indefinitely. The growth rate of? Luther's dividends are closest? to:

A. 14.5%

B. 11%

C. 5%

D. 5.5%