Author: Anonymous

There is a bond that has a quoted price of 107.324 and a par value of $2,000. The coupon rate is 7.08 percent and the bond matures in 18 years. If the bond makes semiannual coupon payments, what is the effective annual interest rate?

You grandfather invested $16,600 years ago to provide annual payments of $700 a year to his heirs forever. What is the rate of return?

Taeyun is retired and his sole source of income is his bond portfolio. Although he has sufficient principal to live on, he only wants to spend the interest income and thus is concerned about the purchasing power of that income. Which one of the following bonds should best ease his concerns?

Brickhouse is expected to pay a dividend of $2.45 and $2.18 over the next two years, respectively. After that, the company is expected to increase its annual dividend at2.5 percent. What is the stock price today if the required return is 9.9 percent?

The most common type of medium-term, amortized business loans has which one of these characteristics over its life?

An investment had a nominal return of 11.4 percent last year. The inflation rate was 3.8 percent. What was the real return on the investment?

Myers has preferred stock outstanding that pays a cumulative $1.50 dividend per quarter. This company has not paid any of its dividends for the past two quarters. How much must be paid as a dividend for each share of preferred stock if the company plans to pay a dividend to its common shareholders this upcoming quarter?

Graphical Designs is offering 10-10 preferred stock. The stock will pay anannual dividend of $10 with the first dividend payment occurring 10 years from today. The required return on this stock is 5.20 percent. What is the price of the stock today?

A proposed project has cash flows of $2,000, $X, $1,750, and $1,250 at the end of Years 1 to 4. The discount rate is 7.2 percent and the present value of the four cash flows is $6,669.25. What is the value of X, the Year 2 cash flow?

Happy Pets has annual sales of $328,000 with 8,000 shares of stock outstanding. The firm has a net profit margin of 4.5 percent and a price-sales ratio of 1.20. What is the firm’s price-earnings ratio?