Question
1. Counselling Co. has 6.75% coupon bonds outstanding with a current market price of $765.24. The yield to maturity is 10.60% and the face value
1. Counselling Co. has 6.75% coupon bonds outstanding with a current market price of $765.24. The yield to maturity is 10.60% and the face value is $1,000. Interest is paid semiannually. How many years is it until these bonds mature?
options:
| 10.64 years | |
| 10.06 years |
2. You are considering the following two mutually exclusive projects. The required rate of return is 12% for project A and 11.75% for project B. You should accept Project ___ because its NPV is _____ greater than that of the other project.
| Year | Project A | Project B |
| 0 | -$54,000 | -$78,900 |
| 1 | $36,300 | $35,700 |
| 2 | $24,600 | $62,800 |
| 3 | $9,500 | $0 |
options:
| A; $1,901.18 | |
| A; $1,449.26 | |
| B; $966.61 | |
| B; $1,821.02 | |
| B; $1,324.08 |
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Canadian Income Taxation Planning And Decision Making
Authors: Joan Kitunen, William Buckwold
17th Edition 2014-2015 Version
1259094332, 978-1259094330
