what is the maximum price you should be willing to pay for the bond

what is the maximum price you should be willing to pay for the bond

Assume that you are going to purchase a 20year
Subject: Business    / Finance   
Question

Assume that you are going to purchase a 20year noncallable bond with an annual coupon rate of 11percent. The bond has a face value 1,000 and it makes semiannual interest payments. If you require a 9percent nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond.

1)1,179.98

2)1,182.57

3)955.95

4)1184.02

5)1170.73

Granali Systems stock currently sells for $12.63pershare. The dividend is projected to increase at a constant rate of 3.5percent per year. The required rate of return on the stock is 11.5percent. What is the stock's expected price 5 years from now?

1)15.5

2)14.73

3)13.01

4)15

5)13.43

last year harrington inc had sales of 325,000 and a net income of 19,000 and its year-end assets were 250,000. The firm's total debt-to-total-assets ratio was 67.5percent. Based on the DuPont equation what was the ROE?

1)23.38percent

2)21.98percent

3)22.68percent

4)22.22percent

5)18.94percent

Which of the following bank accounts would you choose to invest your money in?

1)An accnt that pays 7percent nominal interest with daily compounding(365 day)

2)An acct that pays 7percent with monthly compounding

3)An acct. that pays 8percent nominal interest with annual compounding

4)An acct. that pays 8percrnt nominal interest with monthly compounding

5)An acct. that pays 8percent nominal interest daily compounding(365 day)

Compare the following descriptions of project cash flows and choose the right answer. most likely to produce the highest NPV assuming the dicount rate moves significantly higher.
1)Those projects have large cash in flows in earlier year
2)The acceptability of an investment projects that have the cash in flows are evenly distributed throughout the life of an investment.
4)those projects have a large cash in flows in later years

A company is considering a project that has the following cash flows and WACC data. What is the project's discounted payback?
WACC: 10.00percent
YEar 0 1 2 3
Cash flows -1000 500 500 500
1)1.91 yrs
2)2.09 yrs
3)2.26 yrs
4)2.80 yrs
5)2.35 yrs

A company recently reported 9750 of sales, 5500 of operating cost other than depreciation, and 1250 of depreciation. The company's federal plus state income tax was 35 percent. During this year, the firm had an increase in expenditures on fixed assets and net working capital that totaled 1,550. This challenge in capital expenditures and NOWC was necessary for it to sustain operations and generate future sales and cash flows. What was the free cash flow?
1)1,469
2)1716
3)1,650
4)1,683
5)1,271

What is the internal rate of return of any cash stream?
1)The rate of interest which if used for discounting would make the net present value of the cash flow stream zero
2)The smallest rate which if used for discounting would make the net present value of the cash flow stream negative
3)The maximum rate which if used for discounting would make the net present value of the cash flow stream positive
4)the rate of time preference associated with the cash flow stream