1. Scubapro Corporation has 500,000 shares outstanding and plans to issue 500,000 more shares. The current shareholders have preemptive rights on any new issue of stock by Scubapro Corporation. How many shares of stock would an investor with 20,000 shares, who exercises his preemptive rights on the new stock issue, have the right to buy?

a. 200,000

b. 120,000

c. 20,000

d. 12,000

e. 8,000

2. If the interest rate is 8%, compounded semiannually, the present value of $8,200 to be received in 12 years is ___________

3. Andrea's opportunity cost rate is 11 percent compounded annually. How much must he deposit in an account today if she wants to receive $2,100 at the beginning of each of the next seven years?

a. $10,984

b. $10,998

c. $11,625

d. $11,887

e. $12,564