$1.$ An investor with investment horizon of $10$ years purchases a $12-$year, semiannual coupon bond with coupon rate of $7\mathrm{.}82\%,$ yield to maturity of $7\mathrm{.}24\%,$ and face value of $$1,000.$ Just after buying the bond, the yield to maturity falls to $6\mathrm{.}12\%$ and stays at that level throughout the investment horizon. Calculate the investor's realized return if he reinvests his coupons to his investment horizon and sells the bond at that time.

Group of answer choices

$7\mathrm{.}04\%$

$7\mathrm{.}47\%$

$6\mathrm{.}88\%$

$6\mathrm{.}59\%$

$7\mathrm{.}94\%$

$2.$ ABC and XYZ are identical firms in all respects except for their capital structure. ABC is all$-$equity financed with $$600,000$ in stock. XYZ uses both stock and perpetual debt; its stock is worth $$240,000$ and the interest rate on its debt is $9$ percent. Both firms expect EBIT to be $$78,400.$ Ignore taxes. The cost of equity for ABC is $\_\_\_\_\_$ percent, and for XYZ it is $\_\_\_\_\_\_$ percent.

Group of answer choices

$13\mathrm{.}07$ percent; $19\mathrm{.}17$ percent

$13\mathrm{.}07$ percent; $21\mathrm{.}37$ percent

$12\mathrm{.}35$ percent; $19\mathrm{.}07$ percent

$12\mathrm{.}35$ percent; $21\mathrm{.}37$ percent$4.$Katlin Markets is debating between a levered and an unlevered capital structure. The all$-$equity capital structure would consist of $90,000$ shares of stock. The debt and equity option would consist of $70,000$ shares of stock plus $$400,000$ of debt with an interest rate of $6\mathrm{.}25$ percent. What is the break$-$even level of earnings before interest and taxes between these two options? Ignore taxes.

Group of answer choices

$$112,500$

$$125,000$

$$87,500$

$$75,000$

$5.$The returns on the common stock of New Image Products are quite cyclical. In a boom economy, the stock is expected to return $46$ percent in comparison to $16$ percent in a normal economy and a negative $28$ percent in a recessionary period. The probability of a recession is $25$ percent while the probability of a boom is $30$ percent. What is the standard deviation of the returns on this stock?

Group of answer choices

$27\mathrm{.}39$ percent

$21\mathrm{.}42$ percent

$32\mathrm{.}48$ percent

$38\mathrm{.}11$ percent