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What is the yield to maturity on this bond

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Reference no: EM133034459

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Q1. A broker purchases a stock that pays a $1.15 annual dividend at a price of $16.00. The broker expects a 15% rate of return. What is the total actual return if this broker sells this stock after one year for $19.00?

A. 15.5%

B. 18.4%

C. 20.2%

D. 25.9%

Q2. The current coupon rate on a bond is 6%. And the bond is selling at a 5% discount. What is the yield to maturity on this bond?

A. Greater than 6%

B. Equal to 5%

C. Equal to 6%

D. Less than 6%

Q3. A $1,000 bond with a 5% coupon rate matures in 7 years. The expected return is 6%. Assuming annual compounding. What is the current value of the bond?

A. $910.92

B. $1,057.86

C. $944.18

D. $1,000.00

Q4. A company issues bonds at a market price of $1,100. The face value is $1000. The bonds mature in 18 years and the coupon rate is 6% compounded annually. What is the yield to maturity on this company's bonds?

A. 12.46%

B. 10.00%

C. 6.00%

D. 4.72%

Q5. The market rate of return is 6%. The face value of the bond is $1000, the coupon rate is 10% with annual compounding, and the bond matures in 15 years. What is the value of the bond?

A. $748

B. $1,000

C. $1,248

D. $1,294

Q6. An investor anticipates receiving $72,000 in 6 years. Assuming an annual discount rate of 9%, what is the present value of this company?

A. $42,616

B. $42,931

C. $60,000

D. $66,055

Q7. A doctor will receive $9,000 per year (at the end of the year) for 10 years. The annual interest earned on the investment is 6%. What is the present value of this doctor's investment?

A. $64,240

B. $66,241

C. $90,000

D. $118,627

Q8. A banker wants to retire 20 years from today and would like to have an annual income of $300,000 withdrawn at the end of each year 10 years starting in exactly 20 years. The discount rate is 6%. What is the present value, today?

A. $688,473

B. $2,208,026

C. $3,000,000

D. $3,441,000

Q9. A company's yearend balance sheet shows the following financial data.

AR $200

Inventory $700

Fixed assets $500

Acct's payable $500

Long term debt $1000

What is the company's current ratio?

Q10. Partial financial data for a company is as follows.

EBIT $250,000

Depreciation $10,000

Change in working capital $2,000

Net capital expenditures $3,000

Tax rate 30%

What is the company's free cash flow?

A. $255,000

B. $178,000

C. $180,000

D. $265,000

Reference no: EM133034459

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