Reference no: EM133095955
Questions -
Q1. If you want to earn an annualized discount rate of 2.7%, what is the most you can pay for a 88-day Treasury bill that pays $5,000 at maturity?
Q2. Compute the price of a share of stock that pays a $16 per year dividend and that you expect to be able to sell in one year for $40, assuming you require a 47% return.
Q3. Weeds Co. is selling at $23 per share. The most recent annual dividend paid was $1.7. Using the Gordon Growth model, if the market requires a return of 11%, what is the expected dividend growth rate for Weeds?
Q4. The annualized discount rate on a particular money market instrument is 3.75%. The face value is $200,000 and it matures in 82 days. What is its price?
Q5. Analysts are projecting that Lullaby Inc. will have earnings per share of $3.4. If the average industry ratio is about 32, what is the current price of Lullaby?
Q6. The price of $8,000 face value commercial paper is $7,961. If the annualized discount rate is 4%, when will the paper mature?
Q7. The price of 171-day commercial paper is $7,521. If the annualized investment rate is 4%, what will the paper pay at maturity?
Q8. What would be your annualized discount rate % on the purchase of a 80-day Treasury bill for $4,973 that pays $5,000 at maturity?