# Question 1. a 10-year bond pays 12% interest on a \$1,000 face value

Question 1. A 10-year bond pays 12% interest on a \$1,000 face value annually. If it currently sells for \$1,100, what is its approximate yield to maturity?

Question 2. You buy a new piece of equipment for \$7,360, and you receive a cash inflow of \$1,000 per year for 10 years. What is the internal rate of return?

Question 3. Assume a project has earnings before amortization and taxes of \$15,000,

amortization of \$25,000, and that the firm has a 30 percent tax bracket. What are the after-tax cash flows for the project?

Question 4. How long does it take \$1,000 to quadruple in value if you have an 11% annual return? Assume annual compounding, and express your answer in years (to two decimals).

Question 5. Assume the following spot and forward rates for the euro (\$/euro).

Spot rate = \$1.6277

30-day forward rate = 1.6330

90-day forward rate = 1.6353

120-day forward rate = 1.6387

a) What is the dollar value of one euro in the spot market?

b) Suppose you issued a 120-day forward contract to exchange 200,000 euros into Canadian dollars. How many dollars are involved?

c) How many euros can you get for one dollar in the spot market?

d)What is the 120-day forward premium?

Question 6. The MacHardee Plumbing Company has common stock outstanding. The stock paid a dividend of \$2.00 per share last year, but the company expects that earnings and dividends will grow by 25% for the next two years before dropping to a constant 9% growth rate afterward. The required rate of return on similar common stocks is 13%. What is the per-share value of the company’s common stock?

Question 7. Defense Electronics Corporation is considering building an overseas manufacturing facility to produce radar detection systems. As a consultant to DEC, you have the contract to determine the appropriate discount rate for evaluating this project.

Current information regarding DEC includes:

Debt: 25,000 bonds outstanding, each with a coupon rate of 6.5% paid semi-annually, par value of \$1,000, maturity of 20 years, and current value of 96% of par.

Common Stock: 400,000 shares outstanding with a current value of \$89/share. An annual dividend of \$4.74 has just been paid, and dividends are expected to grow by 9% annually into the foreseeable future.

Preferred Stock: 35,000 shares of 6.5% stock with a par value of \$100/share, and a current value of \$99/share.

Tax rate: DEC’s combined tax rate is 34%.

Other liabilities: DEC has the usual accounts payable and accruals on its balance sheet, but does not regularly utilize any interest-bearing debt other than the bonds described above.

Risk Adjustment: Since the new manufacturing facility is to be built overseas, management is suggesting an adjustment factor of +2% to account for the increased riskiness.

Pages (550 words)
Approximate price: -

Why Work with Us

Top Quality and Well-Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.

Free Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.

Prompt Delivery and 100% Money-Back-Guarantee

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

## Calculate the price of your order

Total price:
\$0.00

How it works?

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.

## Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.