Nankee Company has a bond outstanding with 12 years to maturity, an 8.25% nominal coupon, semiannual payments, and a $1,000 par value. The bond has a 7.50% nominal yield to maturity, but it can be called in 6 years at a price of $1,150. What is the bond’s nominal yield to call?

## What is the project net present value in today dollarsWhat is the project’s net present value in today’s dollars, if the firm waits two years before deciding whether to drill? |

## The default risk premium on the corporate bondA Treasury bond that matures in 10 years has a yield of 6.5%. A 10-year corporate bond has a yield of 10.5%. Assume that the liquidity premium on the corporate bond is 2%. What is the default risk premium on the corporate bond? |

## Annual coupon bond with a face valueConsider an five-year, 12 percent annual coupon bond with a face value of $1,000. The bond is trading at a rate of 9 percent. What is the price of the bond? If the rate of interest increases 1 percent, what will be the bond’s new price? |

## Calculate the projects NPV-IRR-MIRR and PaybackMadison manufacturing is considering a new machine that costs $350,000 and would reduce pre tax manufacturing costs by $110,000 annually. Madison would use the 3 year MACRS method to depreciate the machine, and management thinks the machine would hav.. |

## Required return on equity after the restructuringGreen Manufacturing, Inc., plans to announce that it will issue $2.06 million of perpetual debt and use the proceeds to repurchase common stock. The bonds will sell at par with a coupon rate of 6 percent. Green is subject to a corporate tax rate of 4.. |

## New value of the company after capital restructuringWhat will be the new value of the company after the capital restructuring? |

## What is the total contribution on sale of additional unitswhat is the total contribution on the sale of additional units? |

## Fixed rate mortgage with monthly paymentsAnn is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for $800,000. |

## What should be one year futures price of platinum per ounceThe spot price of platinum is $1170 per ounce. The storage costs are $5 per six months paid the beginning of each six-month period. The continuously compounded interest rate is 5% per year. What should be the 1-year futures price of platinum per ounc.. |

## Describe what is meant risk averse investorWhat is the general formula for declining balance method? Describe what is meant “Risk Averse “Investor? |

## Key features of common stock-key features of preferred stockIn this presentation, you need to discuss the key features of common stock and key features of preferred stock. |

## What is the real risk-free rate of returnwhat is the real risk-free rate of return? What is the yield on 3-year Treasury securities? |

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