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1. A 30-year bond issued 15 years ago with a face value of $1000 is currently trading at $864.10. The bond pays semi-annual coupons at the coupon rate of 6%. What is your YTM?
2. You bought a bond paying semi-annual coupons with face value of $1000 and the annual coupon rate of 9% two years ago for $ 10086.46. What was your holding period return (HPR) on the bond over the past two years, if the current YTM is 7%, the remaining maturity on the bond is 13 years and you were able to re-invest coupons in the past two years at 6%? (Provide your answer in percentage without the % sign)
3. You bought a bond that pays semiannual coupons at the coupon rate of 6%. The bond's par value is $1000. Three years later you sell the bond. What is the future value of the coupons earned in these three years, if you can reinvest coupons at 4% rate?
Sweet Pea, Inc. has just issued nonconvertible preferred stock with a par value of $100 and an annual dividend rate of 15.23 percent. The preferred stock is currently selling for $98.11 per share. What rate of return will the investor expect to recei..
Estimate the firm’s cost of capital. Estimate the value of the equity of the firm at the end of 2011.
Suppose you find evidence that workers who are high school dropouts are more likely to retire at age 62 than are college-educated workers.- Can you think of alternative explanations for this finding?
Today you will deposit $1,000 into a savings account that pays 8%. - If the bank compounds interest annually, how much will you have in your account on January 1, 2012?
George bought a car for $26,500. He made a down-payment of $4,500 and financed the rest on a 5-year term with a monthly payment of $575. What is the interest rate per month for the loan? What is the nominal interest per year?
Supplies Expense of $3,600 was recorded for a given year. Assuming that $2,400 in supplies were purchased during the year and that $640 in supplies remained at year end, what was the cost of supplies at the beginning of the year?
Kose has a beta of 1.3. The market portfolio’s expected rate of return is 14%, and the risk-free rate is 6%. What is Kose’s weighted average cost of capital?
Axel Rose Inc. (ARI) has a 15 year, 12% semi-annual coupon bond that is currently selling for $1,153.72. ARI’s current stock price is $25.00 and the company expects its next dividend to be $2.50 with a constant growth rate of 5%. Calculate the costs ..
Free cash flow is the net income forecast to be available to the venture’s owners over time.
You are negotiating a deal to purchase a fitness center. You feel that the best way to value a firm is using yearly profits. The current owners want $1 million for the center. They let you take a look at their financial information, and you see that ..
The total book value of the firm’s equity is $17 million; book value per share is $34. The stock sells for a price of $45 per share, and the cost of equity is 15%. The firm’s bonds have a face value of $6 million and sell at a price of 120% of face v..
Compute the price of a 6.3 percent coupon bond with 15 years left to maturity and a market interest rate of 10.4 percent.
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