7. A coupon bond pays semi-annual interest, has a par value of $1,000, matures in

12 years, has a coupon of 8.7%, and has a yield-to-maturity of 7.9%. The current

yield on this bond is?

8. Ten years ago, a firm issued $1,000 par value, 30-year bonds with an 6.5% coupon rate and a 7% call premium. These bonds currently trade for $1,325 and are callable beginning 20 years from date of issuance. Assume semi-annual compounding.

a. Calculate the yield-to-maturity of these bonds today?

b. Calculate the yield-to-call on these bonds today?

9. What are the primary differences between NPV, IRR and MIRR?

10. Thomas Commercial is planning to build a new complex on a lot it purchased 10years ago for $500,000. Upon purchase of the lot, the firm spent another $50,000 clearing and leveling the ground. Today, the lot could be sold for $850,000. The estimated cost for the buildings is $2.5 million. What amount should be used as the initial cash flow for the project?

11.) A capital budget project is estimated to have the following after-tax cash flows, by year:

0

1

2

3

4

-$35,000

$13,000

$15,000

$17,000

$19,000

Use the information in the table above for the following questions 11a. through 11f. The company utilizes a discount rate of 9% to evaluate capital projects. You may have rounding errors in your calculations so choose the closest answer.

a.)The DISCOUNTED PAYBACK for the project shown above is:

b.)The NET PRESENT VALUE for the project shown above is:

c.)The INTERNAL RATE OF RETURN for the project shown above is:

d.). The MODIFIED INTERNAL RATE OF RETURN for the project shown above is:

e.)The PROFITABILITY INDEX for the project shown above is:

f.) The PAYBACK for the project shown above is: