Are bond ratings in concept similar to your own personal credit ratings? The U.S. government is the world’s largest borrower and currently enjoys a high-rating for its low default risk. Explain how receiving a lower bond-rating may affect the U.S. government.

Save money for a down payment on the new house : You plan to buy a house in 10 years. You want to save money for a down payment on the new house. You are able to place $406 every month at the end of the month into a savings account at an annual rate of 7.07 percent, compounded monthly. How much mon.. |

What is the maximum number of withdrawals : Your uncle has $300,000 invested at 7.5%, and he now wants to retire. He wants to withdraw $35,000 at the end of each year, beginning at the end of this year. He also wants to have $25,000 left to give you when he ceases to withdraw funds from the ac.. |

Noncallable bonds-what is their yield to maturity : Curtis Corporation's noncallable bonds currently sell for $1,165. They have a 15-year maturity, an annual coupon of $95, and a par value of $1,000. What is their yield to maturity? |

Semi annual bonds-what is the bonds price : Haswell Enterprises' semi annual bonds have a 10-year maturity, a 6.25% semi annual coupon, and a par value of $1,000. The going rate of interest is 4.75%. What is the bond's price? |

How receiving a lower bond-rating may affect the government : Are bond ratings in concept similar to your own personal credit ratings? The U.S. government is the world’s largest borrower and currently enjoys a high-rating for its low default risk. Explain how receiving a lower bond-rating may affect the U.S. go.. |

Extra maintenance cost will be incurred during those years : A used car can be kept for two more years and then sold for an estimated $3000, or it could be sold now for $9500. The average annual maintenance cost over the past 7 years has been $500 per year. The new car will be under warranty for the first 4 ye.. |

What is the stocks current price : A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return is rs=10.5%, and the expected constant growth rate is g=6.4%. What is the stock's current price? |

What is the maximum dollar amount of costly trade credit : Fairweather Corporation purchases merchandise on terms of 2/15, net 40, and its gross purchases (i.e., purchases before taking off the discount) are $800,000 per year. What is the maximum dollar amount of costly trade credit the firm could get, assum.. |

What is harveys maximum moving expense deduction : Harvey graduated college and accepted his first real job in july of 2014. His new employer gave him $500 to help cover the cost of the trip. He drove 1,250 miles. He used a rented trailer to move his personal goods. He paid $350 for meals and $200 fo.. |

## Considering two investment proposalsThompson Manufacturing is considering two investment proposals. The first involves a quality improvement project, and the second is about an advertising campaign. Suppose the hurdle rate of the firm is 10%. Calculate the cash flows of the “incrementa.. |

## What is the bonds after-tax yieldAn investor recently purchased a corporate bond which yields 9%. The investor is in the 36% combined federal and state tax bracket. What is the bond's after-tax yield? |

## What is the total cost at time zero of acceptingYour firm is considering a new product development. an outlay of $90,000 is required for equipment, and an additional net working capital of $5000 is required. the project is expected to have a 4 year life, and the equipment will be depreciated on a .. |

## Interest rate on single paymentYour parents will retire in 14 years. They currently have $300,000, and they think they will need $1 million at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds? |

## New purchase price for the existing stockholdersKatie Homes and Garden Co. has 10,640,000 shares outstanding. The stock is currently selling at $52 per share. If an unfriendly outside group acquired 25 percent of the shares, existing stockholders will be able to buy new shares at 30 percent below .. |

## You are an arbitrageur looking for opportunities toyou are an arbitrageur looking for opportunities to capitalise on mispriced securities. you notice that the bhp put |

## Stockholders equity-what is its economic value addedBarnes’ Brothers has the following data for the year ending 12/31/10: Net income = $600; Net operating profit after taxes (NOPAT) = $700; Total assets = $2,500; Short-term investments = $200; Stockholders' equity = $1,800; Total debt = $700; and Tota.. |

## What is the required return for a stockWhat is the required return for a stock that has a 5.7% constant-growth rate, a price of $21.25, an expected dividend of $1.70, and a P/E ratio of 10? |

## Cost of capital is the same as the cost of equity for firmsThe cost of capital is the same as the cost of equity for firms that are financed: |

## Computing the standard deviation for individual investment(Computing the standard deviation for an individual investment) James Fromholtz is considering whether to invest in a newly formed investment fund. The fund's investment objective is to acquire home mortgage securities at what it hopes will be bargai.. |

## Maturity coupon rate bond is selling to yieldA 5-year maturity 6% coupon rate bond is selling to yield 8%. The bond pays interest semi-annually. One year later, interest rates decrease from 8% to 5%. Par = 1,000. What is the current price of the 5-year maturity 6% coupon bond selling to yield 8.. |

## The after-tax cost of debtThe company pays 50% corporate taxes. What is the after-tax cost of debt? |

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