1) X-Cos bond has a coupon rate of 6%/year payable semiannually. The bond is currently selling for 99 and has 10 years to maturity, A) Is its market rate > or < 6%? B) Is the market rate a lot or a little > or < 6%? Note: > is greater than and < is less than.

2) X-Co is offering a unique perpetual bond that will pay $30 next year, and the $30 will grow at 1.0%/year in the future. If the market rate is 4.15%/year, what is its current market price?

3) Last year X-Cos sales fell 10%, but its net profit fell 69%. In a few words, what is the most likely explanation for this disparity?

4) A) Draw a timeline for a bullet bond, face value of $1,000, with 2 years remaining to maturity that pays a coupon rate of 4%/year semi-annually. B) What is its market price if its market rate is 5%?

5) Construct a timeline from your perspective: You borrow $1,500 from the bank at a 7%/year interest rate payable at the end of each year, and you promise to repay principal as follows: $700 in 2 years, and $800 at final maturity in 4 years.

6) X-Cos Gross and Operating margins contracted by 160 basis points and 70 basis points respectively to 47.4% and 24.0%. What were those margins before they declined?**

7) A) X-Co had book equity of $1,690 at the end of 2020 and $1,815 at the end of 2021. If X-Co had net income of $208 for 2021, what was ROAE for 2021? ** B) how much did X-Co pay in dividends for 2021?

8) For a corporation, a bond is a ________ obligation, but management of a corporation has a _________ duty to its common shareholders.

9) Youre the CFO of X-Co, and you analyzed the degree the companys costs are fixed. For 2021, you found variable costs were $2.16 billion and fixed costs were $860 million. What was its Operating Leverage? **

10) X-Cos net profit was up 188% while its revenue tripled. What happened to its margins?

11) You won the lottery and have settled on the annuity option that pays $500,000/year for 20 years. If you believe you can reliably earn 4%/year, what is its value to you now?

12) X-Cos 7% unsecured bonds price declined from 99.2 to 72.4. A) What are those prices in dollars? B) Did the market yield on X-Cos bond go up or down?

13) Briefly, what are the 3 sources of payment and return for any bullet, coupon paying bond in the US?

14) The discount rate used to calculate the PV of cash flows expected to be received in the future must consider 2 factors. In 3 to 4 words, what are they?

15) X-Cos zero-coupon bond has exactly 5 years to maturity. If it is currently selling for 71, what is its current yield? (Express your answer as a % carried to 2 decimal places.)

16) X-Co had a net loss of $100 million in the 3^rd quarter, but its cash flow from operations was positive $700 million. In a few words, what is the most likely explanation?

17) If the nominal rate is 7.1%/year and inflation is 6.2%/year, what is the real interest rate? (Most credit for the exact calculation carried to 3 places.)

18) If long term debt is $765, preferred stock is $142, and common equity is $951, what is LTD/capitalization? **

19) If interest is paid more than once a year, APR or EAR will be > APR or EAR.

20) If X-Co has sales of $168, direct expense of $99, SG&A of $31, interest expense of $8 and taxes of $7, what is X-Cos net margin? **