1. A firm has $300 million of assets that includes $50 million of cash and 10 million shares outstanding. If the firm uses $30 million of its cash to repurchase 1 million shares, what is the new price per share? Assume no other news announced.

a. $25 b. $27 c. $30

d. $32 e. $33

2. BRC stock is currently trading at $60 per share. If BRC issues a 25% stock dividend, what would its new share price be?

a. $35.00

b. $48.00

c. $60.25

d. $75.00

e. $85.00

3. A firm issues $100 million of one-year zero-coupon bond. If the firm's cost of debt is 10% and its tax rate is 40%, the present value of tax shields (PVTS) of this zero-coupon bond would be

a. zero tax savings because zero-coupon bond pays no regular interests.

b. $ 3.3 million

c. $ 3.6 million

d. $ 8.3 million

e. $ 9.1 million

4. TPC Corp. recently issued 10-year zero-coupon bonds at 7% YTM with a $1,000 par. How much interest per bond should the firm deduct from taxable income in the first year? Assume annual compounding.

a. $0 (since it's a zero-coupon bond)

b. $35.58

c. $50.84

d. $65.42

e. $70.00