Author: Anonymous

Use the Lewis dot structure (make sure you show all electron…

Use the Lewis dot structure (make sure you show all electron pairs) and VSEPR theory to predict the molecular geometry and bond angle in the ammonium ion NH4+. Hint: Use the table below to answer the question.   VSEPR quick reference: electron groups, shapes, and approximate bond angles Electron Groups Bonding Groups Lone Pairs Electron Geometry Molecular Geometry Approximate Bond Angles 2 2 0 Linear Linear 180° 3 3 0 Trigonal planar Trigonal planar 120° 3 2 1 Trigonal planar Bent

You expect General Motors (GM) to have a beta of 1.5 over th…

You expect General Motors (GM) to have a beta of 1.5 over the next year and the beta of Exxon Mobil (XOM) to be 1.9 over the next year. Also, you expect the volatility of General Motors to be 50% and that of Exxon Mobil to be 35% over the next year. Which stock has more systematic risk? Which stock has more total risk?

1. (Bonds) HMK Enterprises would like to raise $10 million t…

1. (Bonds) HMK Enterprises would like to raise $10 million to invest in capital expenditure. The company plans to issue five-year bonds with a face value of $1000 and a coupon rate of 6.5% (annual payments). The following table summarizes the yield to maturity for five-year (annual-pay) coupon corporate bonds of various ratings: Rating AAA AA A BBB BB Yield to maturity 6.20% 6.30% 6.50% 6.90% 7.50% (4 points) Assuming the bonds will be rated AA, what will the price of the bonds be?  (2 points) What must the rating of the bonds be for them to sell at par? Explain. (4 points) Suppose that when the bonds are issued, the price of each bond is $959.54. What is the likely rating of the bonds? Are they junk bonds?    2. (Stocks) Answer the two questions (A and B) below. (7 points) A company has just paid a dividend of $2 per share yesterday. It is estimated that the company’s dividend will grow at a rate of 20% per year for the next 2 years, and then the dividend will grow at a constant rate of 7% thereafter. The company’s stock has a beta equal to 1.2, the risk-free rate is 7.5%, and the market risk premium is 4%. What is your estimate of the stock’s price today? (3 points) A company has stock which costs $42.00 per share and pays a dividend of $2.50 per share at the end of this year. Future dividends are paid annually and are expected to grow at a constant rate. If the discount rate is 8%, what is the expected annual growth rate of the company’s dividends?   3. (Projects) You are choosing between two projects, but can only take one. The cash flows for the projects are given in the following table:   0 1 2 3 4 A -$50 25 20 20 15 B -$100 20 40 50 60 (3 points) What are the IRRs of the two projects? (3 points) If your discount rate is 5%, what are the NPVs of the two projects? (3 points) What is the payback period of the two projects? (1 point) What should you do? Make sure you have read the instructions above the question before you begin writing your answers.