1)Suppose that Rose Industries is considering the acquisition of another firm in its industry for $100 million. The acquisition is expected to increase Rose's free cash flow by $5 million the first year, and this contribution is expected to grow at a rate of 3% every year thereafter. Rose currently maintains a debt to equity ratio of 1, its marginal tax rate is 40%, its cost of debt rD is 6%, and its cost of equity rE is 10%. Rose Industries will maintain a constant debt-equity ratio for the acquisition. The Free Cash Flow to Equity (FCFE) for the acquisition in year 0 is: ?(Million)

2)

Treasury securities that are standard coupon bonds where the outstanding principal is adjusted for inflation are called:

A.Treasury notes.
B.Treasury bonds.
C.TIPS.
D.Treasury bills.

Treasury securities that are standard coupon bonds where the outstanding principal is adjusted for inflation are called:

A.Treasury notes.
B.Treasury bonds.
C.TIPS.
D.Treasury bills.