Reference no: EM13508663
Giraldo's Bass and Pro Shops offer a common stock that pays an annual dividend of $2.00 a share. The company has every intention of maintaining a constant dividend. How much are you willing to pay for one share of this stock if you want to earn 15 percent return on your equity investments?
Helmke's International Mercenary Boutique offers a 15-year bond that pays a 4 percent coupon. The bond is currently priced at $757.60 and has a par value of $1,000. Coupons are paid quarterly. What is the yield to maturity for these bonds?
Markels' Sky's The Limit Ceilings offers a 7 percent coupon bond with semi-annual payments and a yield to maturity of 8.70 percent. The bond matures in 9 years. What is the market price of a $1,000 face value bond?
Prescilia's Multicultural Enterprises offers a 9-year, zero coupon bond. The yield to maturity is 8.8 percent. What is the current market price of this $1,000 face value bond?
Consider an asset that costs $1,600,000. It is depreciated straight-line to zero over its eight-year tax life. What is the book value at the end of 6 years?
The asset from the above problem can be sold at the end of six years for $200,000. If the relevant tax rate is 20 percent, the after tax cash salvage from the sale of this asset is:
$200,000 (since the ATCS can never exceed the sale price.)
An investment project provides cash inflows of $1433 per year for 8 years. If the initial cost is $5,000, the project payback period is:
a. 3.11 years
b. 3.49 years
c. 3.86 years
d. 4.21 years
For the cash flows of the above question, what is the Internal Rate of Return (IRR)?
For the project data of the above two problems, the Profitability Index is:
For the project data of the above 3 problems, if there were 100,000 shares of stock outstanding and your company proceeded with this project, what would be the expected increase in stock price?
Suppose you know a company's stock currently sells for $25 and the required return is 11%. You also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield. If it is the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share?
The first comic book featuring Gitman was sold in 1962. In 2005, the estimated price for this comic book in good condition was $500. This represented a return of 21.91 percent per year. For this to be true, the comic book must have sold for how much originally?
A. 0.25 cents
B. A dime
C. 20 cents
D. About a dollar.