Reference no: EM133119597

Question - At $1,000 par value. a 10% coupon bond matures in 20 years. If the price of the bond is $1,196.80, what is the yield to maturity on the bond? Assume interest is paid annually.

1. Your brother will borrow $17,800 to buy a car. The terms of the loan call for monthly payments for 5 years at an 8.6% annual interest rate, compounded monthly. What is the amount of each payment.

a. 287.71

b. 296.67

c. 301.12

d. 342.76

e. 366.05

f. None of these

2. You plan to pay $50 for a share of preferred stock that pays a $2.40 dividend per year forever. What annual rate of return will you realize?

a. 0.48%

b. 2.40%

c. 4.80%

d. 5.10%

e. 20.83%

f. None of these

3. You are to receive an annuity of $1,000 per year for 10 years. You will receive the first payment two years from today. At a discount rate of 10%, what is the PV of this annuity?

a. $5,078.15

b. $5,585.97

c. $6,144.57

d. $6,759.03

4. TTT Corporation reported earnings per share of $2.52 in 2012 and $3.15 in 2017. At what compound annual rate did earnings per share grow over this period?

a. 3.79%

b. 4.00%

c. 4.56%

d. 5.00%

e. None of these options.