1. Ten years ago, you put $250,000 into an interest-earning account. Today it is worth $475,000. What is the effective annual interest earned on the account?

Walmart is seeking to purchase its current bonds in the marketplace. They are ten-year, semiannual bonds issued three years ago at an interest rate of 5% and due in ten years. If the market yield is 4.25%, what can Walmart expect to pay for the bonds?

Walmarts current dividend is $11 per share and it is expected that the dividend will increase by 5% next year. What is the price of the stock if the expected return on the stock is 15%?

You are analyzing the stock of Boeing. It is currently trading at $285/sh. and has an annual dividend of $5/sh. What will the price of the stock be in one-year if you are seeking an expected return of 12%?

Wilson Corporation generates a 20% return on its investments with a plowback ratio of 30%. Its earnings next year will be $4/sh. If investors are seeking a 12% return on the stock, what is the projected P/E ratio of the firm?

Jensen Corporation projects a 20% rate of return on new investments. Management plans to plowback 30% of earnings into the firm. Earnings this year will be $3/sh. and investors are expecting a 12% rate of return on the stock. What is the current growth rate and stock price?

6. Wilson Corporation is building a new data center. The cost is $53M and it will generate yearly free cash flows of $7M, $15M & $22M. The data center will be sold at the end of year three for net proceeds after tax of $44.8M. There will also be an annual net working capital investment of $2M. If the companys cost of capital is 12%, should this investment be made?

7. Jensen Corporation is analyzing the acquisition of Johnson Industries, Inc. for $22/sh. Johnson has 100 million shares outstanding, projected annual free cash flows of; $150M, $275M and $380M and can be sold at the end of year three net of tax for $25/sh. What is Jensens internal rate of return on this acquisition and if its cost of capital is 12.5% should they make this investment?

8. Jensen Corporation has a new stamping machine the generates annual revenue of $120,000. Variable costs are $40,000/yr. and fixed costs are $15,000/yr. The machine cost $1M and is being depreciated over 25 years using straight-line depreciation. If the firms tax rate is 25% what is the operating cash flow?

Wilson Corporation has the following data for 2020 and 2019

2020

Accounts Receivable $1.2M

Inventory$6.5M

Accounts Payable$1.8M

2019

Accounts receivable $1M

Inventory $6M

Accounts payable $1.5M

You are calculating the free cash flow for 2020 and what is the net operating working capital charge if an

10. Wilson Corporation stock is selling for $40/sh. today. At the end of the year, it pays a dividend of $2/sh. and sells for $44/sh. What is the current rate of return and dividend yield on the stock?