44. 45. Assume you are analyzing a corporate bond with the following characteristics Par value $1000 Coupon rate 8% per year Payment schedule semiannual Maturity 5 years If the market price for this bond is $950, then: A. the yield-to-maturity will be less than 8%. B. the yield-to-maturity will be more than 8%. C. the yield-to-maturity will be equal to 8%. D. the yield-to-maturity will be equal to $1000. E. none of the above is true, Refer to the bond described in #44. Assume that your required rate of return on this bond is 9.5% per year, compounded semiannually. With this required rate of return; A. the value of the bond will be equal to $1000. B. the value of the bond will be less than $1000. C. the value of the bond will be greater than $1000. D. it is impossible to judge the value of the bond based on the information given. E. none of the above is true. Which of the following accounts is NOT included in a company's capital? A. retained earnings C. paid-in capital B. preferred stock D. All are part of capital E. None is a part of capital. 46. 47. 4 years 1 0 2 ---- 325 ---- 500 (650+ 1500) -3000 275 Shown on the time line above are the cash flows (initial, operating, and terminal) for a capital budgeting project. Given a weighted average cost of capital (WACC) of 8% per year, what is the project's net present value (NPV)? A. - $1592.05 C. - $489.50 B. - $967.27 D. - $571.17 E. none of the above 48. Refer to question #47 above. What is the internal rate of return (IRR) of the capital budgeting cash flows? A. 5.78% C. 8% B. 2.39% D. 4% E. none of the above