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Attached are the questions. Please let me know if you need anything else from me. 1. Assuming semiannual compounding, what is the price of a

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Attached are the questions. Please let me know if you need anything else from me.

image text in transcribed 1. Assuming semiannual compounding, what is the price of a zero coupon bond with 12 years to maturity paying $1,000 at maturity if the YTM is (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.): Price of the Bond a. 5 percent $ b. 9 percent $ c. 13 percent $ 2. Grand Adventure Properties offers a 8 percent coupon bond with annual payments. The yield to maturity is 6.85 percent and the maturity date is 8 years from today. What is the market price of this bond if the face value is $1,000? $1,020.76 $1,069.07 $877.51 $1,077.18 $951.69 3. Yan Yan Corp. has a $5,000 par value bond outstanding with a coupon rate of 5.8 percent paid semiannually and 14 years to maturity. The yield to maturity of the bond is 6.4 percent. What is the dollar price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Bond price 4. $ The Starr Co. just paid a dividend of $1.60 per share on its stock. The dividends are expected to grow at a constant rate of 6 percent per year, indefinitely. Investors require a return of 10 percent on the stock. What is the current price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current price $ What will the price be in three years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Stock price $ What will the price be in 12 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Stock price $ 5. Ayden, Inc., has an issue of preferred stock outstanding that pays a dividend of $5.15 every year, in perpetuity. This issue currently sells for $92 per share. What is the required return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Required return 6. % Siblings, Inc., is expected to maintain a constant 6.8 percent growth rate in its dividends, indefinitely. The company has a dividend yield of 8.6 percent. What is the required return on the company's stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Required return % 7. Zoom stock has a beta of 1.46. The risk-free rate of return is 3.07 percent and the market rate of return is 11.81 percent. What is the amount of the risk premium on Zoom stock? 8.09% 9.59% 12.76% 17.24% 10.25% 8. The risk premium for an individual security is computed by: multiplying the security's beta by the risk-free rate of return. dividing the market risk premium by the beta of the security. multiplying the security's beta by the market risk premium. dividing the market risk premium by the quantity (1 + Beta). adding the risk-free rate to the security's expected return. 9. The risk-free rate of return is 3.68 percent and the market risk premium is 7.84 percent. What is the expected rate of return on a stock with a beta of 1.32? 9.17% 13.12% 9.24% 14.03% 14.36% 10. Miller Manufacturing has a target debt-equity ratio of .35. Its cost of equity is 15 percent, and its cost of debt is 9 percent. If the tax rate is 35 percent, what is the company's WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) WACC % 11. Central Systems, Inc. desires a weighted average cost of capital of 6 percent. The firm has an after-tax cost of debt of 4 percent and a cost of equity of 9 percent. What debt-equity ratio is needed for the firm to achieve its targeted weighted average cost of capital? 1.50 1.60 1.67 1.33 1.40 12. Filer Manufacturing has 9 million shares of common stock outstanding. The current share price is $81, and the book value per share is $8. The company also has two bond issues outstanding. The first bond issue has a face value $80 million, a coupon of 10 percent, and sells for 96 percent of par. The second issue has a face value of $50 million, a coupon of 11 percent, and sells for 104 percent of par. The first issue matures in 25 years, the second in 8 years. a. What are the company's capital structure weights on a book value basis? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.) Equity / Value Debt / Value b. What are the company's capital structure weights on a market value basis? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.) Equity / Value Debt / Value c. Which are more relevant? Market value weights Book value weights 13. Titan Mining Corporation has 9.7 million shares of common stock outstanding and 410,000 4 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $45 per share and has a beta of 1.35, and the bonds have 10 years to maturity and sell for 116 percent of par. The market risk premium is 8.5 percent, T-bills are yielding 5 percent, and the company's tax rate is 35 percent. a. What is the firm's market value capital structure? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.) Weight Debt Equity b. If the company is evaluating a new investment project that has the same risk as the firm's typical project, what rate should the firm use to discount the project's cash flows? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Discount rate %

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