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1. The payment structure of a corporate bond is best thought of as: an annuity of interest payments. an annuity of principal and interest payments. an annuity of principal payments. an annuity of interest payments and a single principal payment at maturity. Question 2.2. In an amortized loan, the principal portion: increases with every payment and is zero with the last payment. increases with every payment and completely repays the loan with the last payment. increases with every payment but at a decreasing rate. does not change with every payment. Question 3.3. Which of the following statements is NOT true about future values? All else equal, the higher the interest rate, the larger the future value. All else equal, the lower the interest rate, the larger the future value. All else equal, the longer the investment time, the larger the future value. All else equal, the larger the starting amount, the larger the future value. Question 4.4. An ordinary annuity has its first payment ______, but an annuity due has its first payment _________. at the beginning of the period; at the beginning of the period. at the beginning of the period; at the end of the period. at the end of the period; at the end of the period. at the end of the period; at the beginning of the period. Question 5.5. Simple interest means that: (Points : 1) the interest rate is the same every period. the dollar amount of interest is the same every period. interest is only paid once a year. the compounding periods are annual. Question 6.6. In an amortized loan: the payments are the same every period, but the proportion that is interest increases. the payments are the same every period, and the proportion that is interest also is unchanged. the payments vary every period, but the proportion that is interest doesn't change. the payments are the same every period, but the proportion that is interest decreases. Question 7.7. We would expect that, all else being equal, investors would pay less for a stock that they view as having become more risky. Assume a stock has just paid a $2.00-per-share dividend. Analysts believe that future dividends will grow at a 14% rate. The constant dividend growth rate is 4%. What would the stock price be? $14.29 $20.00 $20.80 $28.57 Question 8.8. Assume a stock has just paid a $2.00-per-share dividend. Analysts believe that future dividends will grow at a 4% rate forever, and investors require an 11% return on their investment in this stock. What should the stock's price be? $18.18 $28.57 $29.71 $31.71 Question 9.9. GMX Resources, an independent oil and gas exploration and production company, has a 9.25% preferred stock outstanding, which pays an annual dividend of $2.3125. If investors require a return of 15% on small companies in this sector, what will this preferred stock sell for? $14.11 $14.72 $15.41 $28.58 Question 10.10. The longer we have to wait for a future amount to be received: the lower its present value will be. the higher its present value will be. Time does not affect present value, so it doesn't matter how long we have to wait. Beyond 10 years the value doesn't change anymore because 10 years might as well be 20 years.
how much must the grandfather put into Ed's trust today and each subsequent year to enable him to have the same retirement nest egg as Steve after the last payment is made on their 65th birthday?
Equipment was purchased for $45,000, plus $2,000 in freight charges.Installation costs were 1,500 and sales tax is totalled$1,000. Hiring a special consultant of the eqipment costs 3,000. What is the assets depreciable basis?
hickock mining is evaluating when to open a gold mine. the mine has 67000 ounces of gold left that can be mined and
Record the journal entries for the transactions listed above. Prepare the stockholders' equity section of Mackeys Corporation's balance sheet as of December 31, 2010. Please explain how "Retained Earnings-Preferred Dividends" is calculated.
What growth rate would you have to use in the multiple-period valuation model to get the same expected return as you computed previously? What is Briggs & Stratton's capital gains yield?
Computation of profit of college at given number of student's strength - If the college can enroll 110 students the first year, how much profit will it make?
Use the data in the figure to calculate the payoff
At a volume of 20,000 direct labor hours, Tirso Company incurs 50,000 in factory overhead costs, including 10,000 in fixed costs. suppose that this activity is within the relevant range,
All of Division A's projects are equally risky, as are all of Division B's projects. However, the projects of Division A are less risky than those of Division B. Which of the following projects should the firm accept?
What cash flow must the investment provide at the end of each of the final 4 years, that is, what is X? (can you show me the math of how to get the right answer) Can you put the above scenario in the context of a real world example?
XYZ Ltd paid= $200,000 for feasibility study on project about a year ago. You are needed to compute: The amount of the loan repayments. The accounting rate of return (gross and net).
allen companys required rate of return is 14. the company is considering the purchase of a new machine that will save
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