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Martinez Motors’ bonds have 18 years remaining to maturity.  Interest is paid annually; they have a $1,000 par value; the coupon interest rate is 9 percent; and the yield to maturity is 8.5 percent.  What is the bond’s current market price?

An annual coupon bond that matures in 17 years sells for $759.35.  It has a face value of $1,000 and a yield to maturity of 10 percent.  What is its current yield (CY)?

What is the present value of a perpetuity that pays $500 per year if the discount rate is 9 percent?

What is the present value of a security that will pay $3,000 in 30 years if securities of equal risk pay 13 percent annually?

A firm’s bonds have a maturity of 15 years with a $1,000 face value, a 10 percent semiannual coupon, are callable in 4 years at $1,050, and currently sell at a price of $1,126.  What is their yield to call (YTC)?

Your uncle has $375,000 and wants to retire. He expects to live for another 25 years, and he also expects to earn 7.5% on his invested funds. How much could he withdraw at the beginning of each of the next 25 years and end up with zero in the account?

EP Enterprises has the following income statement. How much net operating profit after taxes (NOPAT) does the firm have?   Sales $1,800.00 Costs 1,400.00 Depreciation      250.00 EBIT $   150.00 Interest expense        70.00 EBT $     80.00 Taxes (40%)        32.00 Net income $     48.00    

The Wei Company’s last dividend was $1.75. The dividend growth rate is expected to be constant at 1.50% for 2 years, after which dividends are expected to grow at a rate of 8.00% forever. Wei’s required return (rs) is 12.00%. What is Wei’s current stock price?

If D1 = $2, g (which is constant) = 5%, and P0 = $50, the stock’s expected dividend yield is ____________ and capital gains yield is _________________?

A firm with a 10 percent cost of capital is evaluating two projects for this year’s capital budget.  The projects’ expected after-tax cash flows are as follows: Year: 0 1 2 3 Project X: -$13,000 $6,900 $5,600 $6,000 Project Y: -$14,000 $5,500 $6,000 $6,600 If Projects X and Y are mutually exclusive, which one(s) should the firm adopt?