Company A has a beta of 0.70, while Company B’s beta is 1.20. The required return on the stock market is 11.00%, and the risk-free rate is 4.25%. What is the difference between A’s and B’s required rates of return? (Hint: find the required return for each stock and then take the difference.)Ryngaert Inc. recently issued noncallable bonds that mature in 12 years. They have a par value of $1,000 and an annual coupon of 6.7%. If the current market interest rate is 9.0%, at what price should the bonds sell?

## What is the price of the bondA 4-year $1,000 par value bond has a 9% coupon rate and an annual interest rate of 7%. Assume the coupon is paid semiannually. What is the price of the bond? |

## Considering the buyout of an existing publicly tradedFor this discussion, assume that you are an investor and considering the buyout of an existing publicly traded company. There are several areas you plan to focus on during your due diligence process in order to determine the organization's potential .. |

## Refers to the securitization transactionThe following question refers to the securitization transaction “CMLTI 2006-NC2” which is discussed in the FCIC report and in the FCIC resource library. The following question refers to the securitization transaction “CMLTI 2006-NC2” which is discuss.. |

## Delaying reduce the projects coefficient of variationThe firm has a 75% chance if it invests -$1,500 a return of $500 for 7-years, and a 25% chance of returning $25 for 7-years. Assuming that all cash flows are discounted at 10%. Calculate the effect of waiting on the project's risk, using the same dat.. |

## School district has bonds outstanding with a coupon rateUnion Local School District has bonds outstanding with a coupon rate of 4.5 percent paid semiannually and 20 years to maturity. The yield to maturity on these bonds is 3.8 percent and the bonds have a par value of $10,000. What is the dollar price of.. |

## The face value of the bondsA U.S. investor bought a 6 year German federal bond (Bund), the face value of the bonds is 1,000 EUR, the coupon is 1.5%, and the price 1, 125 EUR. At the time of buying the bond, the exchange rate was 1.3824 [USD/EUR], now, three years later, find t.. |

## The growth rate falling off to constantJanicex Co. is growing quickly. Dividends are expected to grow at a rate of 20 percent for the next three years, with the growth rate falling off to a constant 5 percent thereafter. If the required return is 11 percent and the company just paid a div.. |

## Compute the value of this stock with a required returnFinancial analysts believe the stock will be at their price target of $45 in two years. Compute the value of this stock with a required return of 11.4 percent. |

## Considering first round of venture capital investmentTacoCorp is considering a first round of venture capital investment. Taco is the majority shareholder with 1000 shares. Jenny and Kevin each have 250 shares in TacoCorp. Taco’s initial investment is $10000. The VC firm is valuing TacoCorp at $70000. .. |

## Empirical evidence shows-financial market price movementsEmpirical evidence shows that financial market price movements are essentially random. Financial markets are reasonable efficient markets. Financial markets are NOT efficient markets. |

## What is the companys total market value of debtShanken Corp. issued a 18-year, 8 percent semiannual bond 3 years ago. The bond currently sells for 92 percent of its face value. The company’s tax rate is 40 percent. What is the company's total book value of debt? What is the company's total market.. |

## Using expectations theory-what is expected inflation rateSuppose 2-year Treasury bonds yield 5.9%, while 1-year bonds yield 6.8%. r* is 1.75%, and the maturity risk premium is zero. Using the expectations theory, what is the yield on a 1-year bond, one year from now? Calculate the yield using a geometric a.. |

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