You have an opportunity to buy a 1000 bond which matures in

Reference no: EM13392964

1.You have an opportunity to buy a $1,000 bond which matures in 10 years. The bond pays $30 every six months. The current market interest rate is 8%. What is the most you would be willing to pay for this bond?

2. In January, 1998, Harold Black bought 100 shares of Country Homes for $37.50 per share. He sold them in January, 2008 for a total of $9,715.02. Calculate Harold's annual rate of return.

3. Samuel Johnson invested in gold U.S. coins ten years ago, paying $216.53 for one-ounce gold "double eagle" coins. He could sell these coins for $734 today. What was his annual rate of return for this investment?

4. Gary Kiraly wants to buy a new Italian sports car in three years. The vehicle is expected to cost $80,000 at that time. If Gary should be so lucky as to find an investment yielding 12% over that three-year period, how much would he have to invest now in order to accumulate $80,000 at the end of the three years?

5. Mr. Sullivan is borrowing $2 million to expand his business. The loan will be for ten years at 12% and will be repaid in equal quarterly installments. What will the quarterly payments be?

6. Marcia Stubern is planning for her golden years. She will retire in 20 years, at which time she plans to begin withdrawing $60,000 annually. She is expected to live for 20 years following her retirement. Her financial advisor thinks she can earn 9% annually. How much does she need to invest each year to prepare for her financial needs after her retirement?

7. Sara Shouppe has invested $100,000 in an account at her local bank. The bank will pay her a constant amount each year for 6 years, starting one year from today, and the account's balance will be 0 at the end of the sixth year. If the bank has promised Ms. Shouppe a 10% return, how much will they have to pay her each year?

8.The Swell Computer Company has developed a new line of desktop computers. It is estimated that the cash returns generated by the new product line will be $800,000 per year for the next five years, and then $500,000 per year for 3 years after that (the cash returns occur at the end of each year). At a 9% interest rate, what is the present value of these cash returns?

9.Kimberly Ford invested $10,000 10 years ago at 16 percent, compounded quarterly. How much has she accumulated?

10. Sponge Bob will receive a payment of $5,000 per year for 7 years beginning three years from today. At a discount rate of 9 percent, what is the present value of this deferred annuity?

11. Fullerton Company's bonds are currently selling for $1,157.75 per $1000 par-value bond. The bonds have a 10% coupon rate and will mature in 10 years. What is the approximate yield to maturity?

12. Madison Corporation has a $1000 par value bond outstanding paying annual interest of 7%. The bond matures in 20 years. If the present yield to maturity for this bond is 9%, calculate the current price of the bond using annual compounding. Use annual analysis.

13. Corporation has a $1000 par value bond outstanding paying annual interest of 8%. The bond matures in 20 years. If the present yield to maturity for this bond is 10%, calculate the current price of the bond. Use annual analysis

14. The preferred stock of Gapers Inc. pays an annual dividend of $6.50. What is the price of the preferred stock if the required return is:

a)      6%
b)      8%
c)       10 %

15. The preferred stock of Lewis-Schultz Enterprises pays an annual dividend of $6.00. What is the required return if the market value of the preferred stock:

a)60%
b)70%
c)80%

16. State Street Corp. will pay a dividend on common stock of $4.80 per share at the end of the year. The required return on common stock (Ke) is 13.2%. The firm has a constant growth rate of 7.2%. Compute the current price of the stock (Po).

17. Simon Fixtures Corp. is expected to pay $2.00 per share in dividends at the end of the next 12 months. The growth rate in dividends is expected to be constant at 8% per year. If the stock is selling for $50 per share, what is the required rate of return?

Reference no: EM13392964

Questions Cloud

Assume that entry or exit occurs in monopolistic industry : assume that in short-run equilibrium a particular monopolistically competitive firm charges 12 for each unit of its

Brown is a licensed cpa throughout the first month of : brown is a licensed cpa. during the first month of operations of her business a sole proprietorship the following

Recognize and explain the six principles for organizations : 1. define social responsibility. 2.list the three main reasons for government regulation of businesses. 3. explain the

What have been the impacts of organizations who have : michael porter was a business researcher who made popular the concept of a value chain that is common to most business

You have an opportunity to buy a 1000 bond which matures in : 1.you have an opportunity to buy a 1000 bond which matures in 10 years. the bond pays 30 every six months. the current

Explain the best possible steps for a project manager to : demonstrate the best possible steps for a project manager to take in order to price out a job in which the

The function or functions of the non-verbal communication : this report should be 700 to 1000 words written in third-person narrative style and apa 6th edition format with topic

Compute total cost and the average total cost and add it to : you are the owner of a small bread factory and are thinking of lowering costs and expanding. your small-business

Given that you are rolling your services out in a foreign : given that you are rolling your services out in a foreign country there will be a need to learn from other companies

User Account

All Pages