Consider the following information: State of Economy Probability of State of Economy Rate of Return if State Occurs Recession .35 −.09 Boom .65 .21 Required: Calculate the expected return. (Do not include the percent sign (%). Round your answer to 2 decimal places (e.g., 32.16).)

Bond ratings and prices-change in the percentage terms : A corporate bond with a 6.900 percent coupon has thirteen years left to maturity. It has had a credit rating of BB and a yield to maturity of 8.5 percent. What will be the change in the bond’s price in dollars? What will be the change in the percenta.. |

Create portfolio equally as risky as the market : You want to create a portfolio equally as risky as the market, and you have $500,000 to invest. Information about the possible investments is given below: Asset Investment Beta Stock A $ 130,000 .75 Stock B $ 150,000 1.20 Stock C 1.35 Risk-free asset.. |

Convertible bond-what is minimum value of this bond : A convertible bond has a 9 percent coupon, paid semiannually, and will mature in 12 years. If the bond were not convertible, it would be priced to yield 8 percent. The conversion ratio on the bond is 25 and the stock is currently selling for $43 per .. |

Statements is typically correct for going-concern firm : Which one of the following statements is typically correct for a going-concern firm? |

Economy probability of state of economy rate of return : Consider the following information: State of Economy Probability of State of Economy Rate of Return if State Occurs Recession .35 −.09 Boom .65 .21 Required: Calculate the expected return. |

Preparing to make monthly payments : You are preparing to make monthly payments of $75, beginning at the end of this month, into an account that pays 6 percent interest compounded monthly. How many payments will you have made when your account balance reaches $10,000? |

What was price of the company stock stock split : Albany Motors recently completed a 3-for-1 stock split. Prior to the split, the company had 10 million shares outstanding and its stock price was $150 per share. After the split, the total market value of the company's stock equaled $1.5 billion. Wha.. |

What is the percentage price change of bonds : Bond J has a coupon rate of 6 percent and Bond K has a coupon rate of 12 percent. Both bonds have 15 years to maturity, make semiannual payments, and have a YTM of 9 percent. If interest rates suddenly rise by 2 percent, what is the percentage price .. |

Bond prices and interest rate changes : Bond Prices and Interest Rate Changes (LG5) A 7.8 percent coupon bond with 18 years left to maturity is priced to offer a 6.40 percent yield to maturity. You believe that in one year, the yield to maturity will be 7.0 percent. What would be the total.. |

## Nonrecurring items-indicate appropriate accounting treatmentFor each of these nonrecurring items, give an example and indicate (match with) the appropriate accounting treatment. Extraordinary item. Prior period adjustment. Change in accounting estimate. Shown net as a separate line item between net income an.. |

## What is your holding-period returnYou buy a(n) five-year bond that has a 4.00% current yield and a 4.00% coupon (paid annually). In one year, promised yields to maturity have risen to 5.00%. What is your holding-period return? |

## Required return on the riskier stock exceed required returnStock R has a beta of 1.2, Stock S has a beta of 0.40, the expected rate of return on an average stock is 13%, and the risk-free rate is 3%. By how much does the required return on the riskier stock exceed the required return on the riskier stock exc.. |

## Appropriate discount rate-what is the present valueAn investment will pay you $88,000 in six years. Assume the appropriate discount rate is 8 percent compounded daily. Required: What is the present value? |

## Find the internal rate of return for series of cash flowsFind the internal rate of return for the following series of cash flows. The initial outlay is $670,560. |

## Calculate total estimated bad debt for the monthsEighty five percent of sales are on credit. Two percent of credit sales are never collected; thirty percent of credit sales are paid for in the month of sale and the remaining credit sales are collected in the following month. Calculate balance in it.. |

## Calculate the sum of the present value of total dividendsGeneral Mills (NYSE: GIS) is a large manufacturer and distributor of package consumer food products. Benoit Gagnon, a buy-side analyst covering General Mills, has studied the historical growth rates in sales, earnings, and dividends for GIS, and also.. |

## Expectations hypothesis for interest rates"Assume that the Expectations Hypothesis for interest rates is true. If the real rate of interest is 3% and the expected inflation rate is 3%, then the nominal interest rate will also be 3%." Actively managed mutual funds generally have higher fees t.. |

## Planning process for a firmYou are involved in the planning process for a firm that is expected to have a large increase in sales for the next year. Which type of firm would benefit the most from that sales increase: a firm with low fixed costs and high variable costs or a .. |

## Present value of dividendsPresent value of dividends: Fresno Corp. is a fast-growing company that expects to grow at a rate of 30 percent over the next two years and then to slow to a growth rate of 18 percent for the following three years. If the last dividend paid by the co.. |

## Transformation of primary securities into secondary claimsWhat are the economic functions that financial intermediaries perform that benefit society? Be sure to explain how depository intermediaries, like banks, differ from other financial institutions such as investment banking firms or securities brokerag.. |

## What is there to lose by waiting three monthsHow can the team hedge its position? What is there to lose by waiting three months to see if the exhibition game is approved before hedging? |

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