Answer the following questions and put calculations:

9. Columbia Bank & Trust has just given you a $20,000 term loan to pay for a new concrete mixer. The loan requires five equal annual (end of year) payments. If the loan provides the bank with a 12 percent return, what will be your annual payments?

a)$5,547.85

b)$3,148.12

c)$6,000.00

d)$1,666.67

10. Each year a company is required to place money into a bank account to retire its bond's principal at maturity. If the bond's principal is $10 million, and bank interest is estimated at 8%, how much are the annual payments if they are to be made over the last 20 years of the bond's life?

a)$101,853

b)$218,522

c)$462,950

d)$425,387

25. Because of a lucky breakthrough, Philadelphia Pharmaceuticals current dividend per share of $2.00 is expected to grow at a very high 32 percent per year for the next three years and then to grow at a more normal 6 percent per year. What is the value of a Philadelphia share if the investors expected return is 20 percent?

20. Common stockholders:

a)have a residual claim on both income and assets

b)are last in line in the event of bankruptcy

c)have a higher claim on assets than preferred stockholders

d)both a & b

e)all of the above

13. If a bond is selling at par value, which of the following would be the same as its coupon rate:

a)Current Yield

b)Yield to Maturity

c)Market Interest Rate

d)Both b & c

e)All of the above