6. Net Present Value
A golf resort is redoing its golf course at a cost of $2,744,320. It expects to generate cash flows of $1, 223,445, $2,007,812, and $3,147,890 over the next three years. If the appropriate discount rate for the firm is 13 percent, what is the NPV of this project?
NPV

7. Preferred Stock Value
The National Bank of Columbia has issued perpetual preferred stock with a $100 par value. The bank pays a quarterly dividend of $1.50 on this stock. What is the current price of this preferred stock given a required rate of return of 8.5 percent?
Price

10 Paints 5. Yield te Mat ity An invesr buys a 15-year bond with a $1,000 face vale for $950. The bonds coupon rate is 8 percent and interest payments are made semi-anally. Usng the YTM (yield to maliily) appruximaion foma, whatis the bond's yield to malily YTM Approx YTM = Appror YTAM C = Coupon/ Interest Payment F = Face Value P = Price n-years to maturity