1- The Shoe Box will not pay a dividend for the next two years. The following two years, it will pay annual dividends of $1 per share. Starting in year 5, the dividends will increase by 4 percent annually. The discount rate is 8 percent. What is the value of this stock today?

THE CORRECT ANSWER IS $20.64

2- The Retail Box has an historical P/CF ratio of 21.5. The current CFPS is $1.42 and the projected CFPS growth rate is 5.6 percent. The current EPS is $1.02. What is the expected price of this stock one year from now?

THE CORRECT ANSWER IS $32.24

3- The Brown Jug has paid annual dividends of $0.62, $0.65, $0.70, $0.80, and $0.85 per share over the past 5 years, respectively. What is the geometric average dividend growth rate for this period?

The correct answer is: 8.21 percent

4- Miller's Farm has 110,000 shares of stock outstanding, sales of $960,000, and net income of $51,000. Financial analysts believe the price-earnings ratio for this firm should be 16.7. Given this information, what should be the current stock price

answer . $7.74

5- Ultra Fine Furnishings is in the process of selling its peripheral businesses and focusing on its upscale clients. In conjunction with this reorganization, the dividend will be decreased by 10 percent for the next two years. After that, the dividend will resume increasing at an annual rate of 6 percent. The required return on this stock is 14 percent and the last dividend paid was $2.80 a share. What is one share of this stock worth today?

The correct answer is: $27.08

6- A Treasury bill has 36 days left to maturity. The bank discount yield on the bill is 3.34 percent. What is the effective annual rate?

The correct answer is: 3.45 percent

7- Your credit card has an annual percentage rate of 18.9 percent and compounds interest daily. What is the effective annual rate?

The correct answer is: 20.80 percent

8- A Treasury bill is quoted at a bank discount yield of 1.08 percent and has 7 days to maturity. What is the bond equivalent yield given that this is a leap year?

The correct answer is: 1.10 percent

9- A Treasury bill matures in 81 days and has a bond equivalent yield of 2.79 percent. What is the effective annual rate?

The correct answer is: 2.82 percent

10- A bond has a dollar value of an 01 of .0634. What is the yield value of a 32nd?

The correct answer is: .4929

11- The outstanding bonds of International Plastics mature in 4 years and pay semiannual interest payments of $32.50 on a $1,000 face value bond. The bonds are currently selling for $1,008.64. The coupon rate is _____ percent, the current yield is _____ percent, and the yield to maturity is _____ percent.

Select one: A. 6.50; 6.44; 6.25 B. 6.50; 6.56; 6.75 C. 6.44; 6.50; 6.75 D. 6.75; 6.56; 6.50 E. 6.75; 6.81; 6.95

The correct answer is: 6.50; 6.44; 6.25

12- You own a bond that pays semiannual interest payments of $40. The bond is callable in 3 years at a premium of $80. What is the callable bond price if the yield to call is 9.7 percent?

Select one: A. $995.46 B. $1,016.86 C. $1,119.02 D. $1,124.87 E. $1,220.87

The correct answer is: $1,016.86

13- Green Recycling, Inc. has 150,000 shares of stock outstanding. The firm has total assets of $568,000 and total liabilities of $415,000. The firm's stock is selling for $27 a share. What is the price-book ratio?

The correct answer is: 26.5

14- The Cruise Ship Co. has taxable income of $4,000,000. The company paid out $550,000 in interest expense. The tax rate is 35 percent and the dividend payout ratio is 30 percent. What is the amount that was paid out in dividends?

Select one: A. $420,000 B. $550,000 C. $672,750 D. $780,000 E. $980,000

The correct answer is: $780,000

15- GH Enterprises has annual sales of $5.2 million, depreciation of $350,000, operating expenses of $390,000, and cost of goods sold of $2.9 million. What is the gross profit?

Select one: A. $460,000 B. $850,000 C. $2,300,000 D. $2,650,000 E. $3,710,000

The correct answer is: $2,300,000

16- Healthy Supplements, Inc. paid $5,200 in interest and $4,300 in dividends for the year. The firm also issued $12,000 worth of new equity securities. What is the amount of the financing cash flow?

The correct answer is: $7,700