- 11.5%. Number of years to maturity is 8. The bond has a coupon rate of 13% that is paid out semi-annually. Its value is $1,000 at the end of its maturity. What is its price on the date of issue? (a) 5960.09 (6) $1,099.86 (e) $1,077.12 (d) $987.50 (e) $1,106.64 A23. Projects A and B are being considered by your firm, to increase firm output of widgets. The cost of capital for both projects is 15%. For Project A the cash flows (8) are -$2,150,000, $450,000, $750,000, $1,200,000 and $1,500,000 in years zero through 4 and for Project B the cash flows are - $2,150,000, $1,200,000, $900,000, $650,000 and $600,000. The projects in A and B are characterized by (a) timing differences and NPVA $455, 061.44 (b) scale differences and NPV, $344, 445.05 (c) NPVA =$409,767.4 and common volatility. (d) common volatility of cash flows and NPV) -$479,647.67 (e) all of the above. A24. Cretarix Corporation's stock is very risky. Given its level of systematic risk, holders of the stock must be compensated at the 25% rate of return level. Currently the stock trades at $115.94. Over the course of the next year, everyone believes, including you, that its price will top out at $150.00. Based on all available information and your belief in SML theory, you conclude (a) the stock is underpriced by 5.5% and its expected returns plots above the SML (b) the stock is overpriced by 3.5% and its expected returns plots below the SML (c) the stock is overpriced by 2.5% and its expected returns plots above the SML (d) the stock is underpriced by 3.5% and its expected returns plots above the SML (@) the stock is overpriced by 5.5% and its expected returns plots above the SML