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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?

If a firm’s beta is 1.6, the risk-free rate is 4.5%, and the expected return on the market is 10.5%, what will be the firm’s cost of equity using the CAPM approach?

A firm with a 12 percent cost of capital is considering a project for this year’s capital budget.  The project’s expected after-tax cash flows are as follows: Year: 0 1 2 3 4 Cash flow: -$5,000 $2,400 $2,200 $2,400 $2,200 Calculate the project’s profitability index (PI).

Kiev Corporation’s outstanding bonds have a $1,000 par value, a 13 percent semiannual coupon, 10 years to maturity, and an 11.5 percent yield to maturity (YTM).  What is the bond’s price?

Suppose you inherited $275,000 and invested it at 8.25% per year. How much could you withdraw at the end of each of the next 20 years?