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What is the dirty price of a? bond

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Reference no: EM133070800

1) What is the dirty price of a? bond?

A. the? bond's actual cash price
B. the? bond's price based only on coupon payments
C. the? bond's price based only on the? bond's yield
D. the? bond's price less an adjustment for changes in interest rates

2) Martin wants to provide money in his will for an annual bequest to whichever of his living relatives is oldest. That bequest will provide $7,000 in the first? year, and will grow by 5?% per? year, forever. If the interest rate is 9?%, how much must Martin provide to fund this? bequest?

a. $175,000
B. $210,000
C. $140,000
D. 87,500

3) JRN Enterprises just announced that it plans to cut its? next-year dividend, D1?, from $2.00 to $1.40 per share and use the extra funds to expand its operations. Prior to this? announcement, JRN's dividends were expected to grow at 6?% per year and? JRN's stock was trading at $25.50 per share. With the new? expansion, JRN's dividends are expected to grow at 12?% per year indefinitely. Assuming that? JRN's risk is unchanged by the? expansion, the value of a share of JRN after the announcement is closest? to:

A. $17.85
B. $108.52
C. $25.50
D. $75.96

4) Salvatore has the opportunity to invest in a scheme which will pay $7,500 at the end of each of the next 5 years. He must invest $15,000 at the start of the first year and an additional $15,000 at the end of the first year. What is the present value of this investment if the interest rate is 8?%?

A. $19,188.38
B. -19,188.38
C. $1,056.44
D. -$1,056.44

5) Jumbo? Transport, an? air-cargo company, expects to have earnings per share of $2.00 in the coming year. It decides to retain 20?% of these earnings in order to lease new aircraft. The return on this investment will be? 25%. If its equity cost of capital is 14?%, what is the expected share price of Jumbo? Transport?

A. $12.45
B. $10.67
C. 14.22
D. 17.78

6) A university issues a bond with a face value of $10,000 and a coupon rate of 4.12?% that matures on? 07/15/2018. The holder of such a bond receives coupon payments of $206. How frequently are coupon payments made in this? case?

A. Monthly
B. Annually
C. Semiannually
D. Quarterly

7) An annuity pays $13 per year for 48 years. What is the future value? (FV) of this annuity at the end of that 48 years given that the discount rate is 8?%?

A. $7,646.06
B. 8,920.41
C. $6,371.72
D. 3,823.03

Reference no: EM133070800

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