Attached are the two spreadsheets that I have already completed, but I can't for the life of me explain how the formula's work. I have also attached the questions that I have to answer. I have answered some and other's I just can't figure it out. The questions that are highlighted in red I have not answered. The others I have, but would appreciate if you could review.

Chapter 5 Problems 1, 2, 3, 4, 5 Input boxes in tan Output boxes in yellow Given data in blue Calculations in red Answers in green NOTE: Some functions used in these spreadsheets may require that the "Analysis ToolPak" or "Solver Add-In" be installed in Excel. To install these, click on the Office button then "Excel Options," "Add-Ins" and select "Go." Check "Analyis ToolPak" and "Solver Add-In," then click "OK." ets may require that nstalled in Excel. Chapter 5 Question 3 Output area: $ $ $ $ Present value 5,039.79 39,332.59 1,730.78 3.37 Input area: Years Interest rate Future value 13 9% $ 15,451 4 7% $ 51,557 29 24% $ 886,073 40 35% $ 550,164 Chapter 5 Question 4 Input area: Output area: Present value Years Interest rate Future value $ 181 4 13.18% $ 297 335 18 6.72% 1,080 48,000 19 7.37% 185,382 40,353 25 10.86% 531,618 Chapter 8 Problems 4, 6, 7, 32 Input boxes in tan Output boxes in yellow Given data in blue Calculations in red Answers in green NOTE: Some functions used in these spreadsheets may require that the "Analysis ToolPak" or "Solver Add-In" be installed in Excel. To install these, click on the Office button then "Excel Options," "Add-Ins" and select "Go." Check "Analyis ToolPak" and "Solver Add-In," then click "OK." ets may require that nstalled in Excel. Chapter 8 Question 6 Input area: Stock price Required return $ 63.00 10.5% Next year's dividend $ 3.31 Current dividend $ 3.14 Output area: Running head: QUESTIONS AND PROBLEM SETS 1 Questions and Problem Sets Danielle Hall FIN/370 June 19, 2017 Mr. Richard Jenkins QUESTIONS AND PROBLEM SETS 2 Questions and Problem Sets Chapter Five Questions Question #3: For each of the following, compute the present value: Answer: Please see the attached spreadsheet (Chp 05_Problem 3 and 4_template_Danielle Hall). After inputting the numbers from the above table I received the following dollar amount for each present value $5,039.79, $39,332.59, $1,730.78, $3.37. The formula that would be used would be: PV=FV / (1 + r)t Question #4: Solve for the unknown interest rate in each of the following: Answer: Please see the attached spreadsheet (Chp 05_Problem 3 and 4_template_Danielle Hall). After inputting the numbers from the above table I received the following interest rate value: 13.18%, 6.72%, 7.37%, and 10.86%. The formula that would be used would be: FV = PV(1 + r)t QUESTIONS AND PROBLEM SETS 3 Chapter Six Questions Question #2: Investment X offers to pay you $4,700 per year for eight years, whereas Investment Y offers to pay you $6,700 per year for five years. Which of these cash flow streams has the higher present value if the discount rate is 5 percent? If the discount rate is 15 percent? Answer: At a 5% interest rate: X@5% PV = $4,700 {[1 - (1 / 1.05) 8] / .05} = $30,377.10 Y@5% PV = $6,700 {[1 - (1 / 1.05)5] / .05} = $29,007.49 At a 15% interest rate: X@15% PV = $4,700 {[1 - (1 / 1.15) 8] / .15} = $21,090.41 Y@15% PV = $6,700 {[1 - (1 / 1.15)5] / .15} = $22,459.44 Investment X has a greater PV at an interest rate of 5%, but has a lower PV at a 15% interest rate. Investment Y has a lower PV at an interest rate of 5%, but has a higher PV at a 15% interest rate. Based on this data Investment X's has a higher present value based on the discount rate of 5% and Investment Y has the higher present value based on the discount rate of 15%. Question #20: You want to buy a new sports coupe for $79,500, and the finance office at the dealership has quoted you an APR of 5.8 percent for a 60-month loan to buy the car. What will your monthly payments be? What is the effective annual rate on this loan? Answer: Monthly payments... QUESTIONS AND PROBLEM SETS 4 Chapter Seven Questions Question #3: Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of 1,000, 23 years to maturity, and a coupon rate of 5.8 percent paid annually. If the yield to maturity is 4.7 percent, what is the current price of the bond? Question #11: Union Local School District has a bond outstanding with a coupon rate of 3.7 percent paid semiannually and 16 years to maturity. The yield to maturity on this bond is 3.9 percent, and the bond has a par value of $5,000. What is the price of the bond? Chapter Eight Questions Question #1: The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.95 per share on its stock. The dividends are expected to grow at a constant rate of 4 percent per year indefinitely. If investors require a return of 10.5 percent on The Jackson-Timberlake Wardrobe Co. stock, what is the current price? What will the price be in three years? In 15 years? Question #6: Suppose you know that a company's stock currently sells for $63 per share and the required return on the stock is 10.5 percent. You also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield. If it's the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share? Answer: $3.14 (Chp 08_Problem 6_template_Danielle Hall) QUESTIONS AND PROBLEM SETS 5 QUESTIONS AND PROBLEM SETS 6 References Jordan, B., Ross, S., & Westerfield R. (2016). Fundamentals of Corporate Finance (11th ed.). New York, NY: McGraw-Hill Running head: QUESTIONS AND PROBLEM SETS 1 Questions and Problem Sets Danielle Hall FIN/370 June 19, 2017 Mr. Richard Jenkins QUESTIONS AND PROBLEM SETS 2 Questions and Problem Sets Chapter Five Questions Question #3: For each of the following, compute the present value: Answer: Please see the attached spreadsheet (Chp 05_Problem 3 and 4_template_Danielle Hall). After inputting the numbers from the above table I received the following dollar amount for each present value $5,039.79, $39,332.59, $1,730.78, $3.37. The formula that would be used would be: PV=FV / (1+ r)t Question #4: Solve for the unknown interest rate in each of the following: Answer: Please see the attached spreadsheet (Chp 05_Problem 3 and 4_template_Danielle Hall). After inputting the numbers from the above table I received the following interest rate value: 13.18%, 6.72%, 7.37%, and 10.86%. The formula that would be used would be: FV = PV(1 + r)t QUESTIONS AND PROBLEM SETS 3 Chapter Six Questions Question #2: Investment X offers to pay you $4,700 per year for eight years, whereas Investment Y offers to pay you $6,700 per year for five years. Which of these cash flow streams has the higher present value if the discount rate is 5 percent? If the discount rate is 15 percent? Answer: At a 5% interest rate: X@5% PV = $4,700 {[1 - (1 / 1.05) 8] / .05} = $30,377.10 Y@5% PV = $6,700 {[1 - (1 / 1.05)5] / .05} = $29,007.49 At a 15% interest rate: X@15% PV = $4,700 {[1 - (1 / 1.15) 8] / .15} = $21,090.41 Y@15% PV = $6,700 {[1 - (1 / 1.15)5] / .15} = $22,459.44 Investment X has a greater PV at an interest rate of 5%, but has a lower PV at a 15% interest rate. Investment Y has a lower PV at an interest rate of 5%, but has a higher PV at a 15% interest rate. Based on this data Investment X's has a higher present value based on the discount rate of 5% and Investment Y has the higher present value based on the discount rate of 15%. Question #20:You want to buy a new sports coupe for $79,500, and the finance office at the dealership has quoted you an APR of 5.8 percent for a 60-month loan to buy the car. What will your monthly payments be? What is the effective annual rate on this loan? Answer: Monthly payments... QUESTIONS AND PROBLEM SETS P= 4 r (PV ) 1(1+r )n Where r=5.8%/12=0.483% n=60 PV=79500 P= 0.483 (79500) 1(1+0.483 )60 =$1529.575 EAR = (1 + APR)^n - 1 EAR = (1+0.058/12)^12-1=5.96% Chapter Seven Questions Question #3: Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of 1,000, 23 years to maturity, and a coupon rate of 5.8 percent paid annually. If the yield to maturity is 4.7 percent, what is the current price of the bond? FV=1000 N=23 years R=4.7% QUESTIONS AND PROBLEM SETS 5 PMT=5.8%*1000=58 PV= 58[1 - 1/(1.058)23] / .058 + 1000 / (1.058)23 =1000 Question #11: Union Local School District has a bond outstanding with a coupon rate of 3.7 percent paid semiannually and 16 years to maturity. The yield to maturity on this bond is 3.9 percent, and the bond has a par value of $5,000. What is the price of the bond? Price of a bond= PV of annuity + PV of lump sum Coupon rate=3.7% T=16*2=32 Par value=5000 YTM=3.9%/2=1.95% PMT=(3.7%*5000)/2 1 1 - 1.0195 32 5,000 Bond Price 92.5 4881.80 0.0195 1.0195 32 =$4881.80 Chapter Eight Questions QUESTIONS AND PROBLEM SETS 6 Question #1:The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.95 per share on its stock. The dividends are expected to grow at a constant rate of 4 percent per year indefinitely. If investors require a return of 10.5 percent on The Jackson-Timberlake Wardrobe Co. stock, what is the current price? What will the price be in three years? In 15 years? P0 = D0(1+g) / (r - g) = (1.95*1.04) / (0.105 - 0.04) = $31.2 Dividend in 4 years = D0* (1+g)^4 D4=1.95(1.04)^3=$2.28 Price in 3 years: D4/(r - g) =$2.28/(0.105 - 0.04)=$35.08 Dividend in 16 years = D0* (1+g)^16 D16=1.95(1.04)^16=$3.65 Price in 15 years: D16/(r - g) =$3.65/(0.105 - 0.04) =$56.15 Question #6: Suppose you know that a company's stock currently sells for $63 per share and the required return on the stock is 10.5 percent. You also know that the total return on the QUESTIONS AND PROBLEM SETS 7 stock is evenly divided between a capital gains yield and a dividend yield. If it's the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share? Answer: $3.14(Chp 08_Problem 6_template_Danielle Hall) QUESTIONS AND PROBLEM SETS 8 References Jordan, B., Ross, S., &Westerfield R. (2016). Fundamentals of Corporate Finance (11th ed.). New York, NY: McGraw-Hill Running head: QUESTIONS AND PROBLEM SETS 1 Questions and Problem Sets Danielle Hall FIN/370 June 19, 2017 Mr. Richard Jenkins QUESTIONS AND PROBLEM SETS 2 Questions and Problem Sets Chapter Five Questions Question #3: For each of the following, compute the present value: Answer: Please see the attached spreadsheet (Chp 05_Problem 3 and 4_template_Danielle Hall). After inputting the numbers from the above table I received the following dollar amount for each present value $5,039.79, $39,332.59, $1,730.78, $3.37. The formula that would be used would be: PV=FV / (1+ r)t Question #4: Solve for the unknown interest rate in each of the following: Answer: Please see the attached spreadsheet (Chp 05_Problem 3 and 4_template_Danielle Hall). After inputting the numbers from the above table I received the following interest rate value: 13.18%, 6.72%, 7.37%, and 10.86%. The formula that would be used would be: FV = PV(1 + r)t QUESTIONS AND PROBLEM SETS 3 Chapter Six Questions Question #2: Investment X offers to pay you $4,700 per year for eight years, whereas Investment Y offers to pay you $6,700 per year for five years. Which of these cash flow streams has the higher present value if the discount rate is 5 percent? If the discount rate is 15 percent? Answer: At a 5% interest rate: X@5% PV = $4,700 {[1 - (1 / 1.05) 8] / .05} = $30,377.10 Y@5% PV = $6,700 {[1 - (1 / 1.05)5] / .05} = $29,007.49 At a 15% interest rate: X@15% PV = $4,700 {[1 - (1 / 1.15) 8] / .15} = $21,090.41 Y@15% PV = $6,700 {[1 - (1 / 1.15)5] / .15} = $22,459.44 Investment X has a greater PV at an interest rate of 5%, but has a lower PV at a 15% interest rate. Investment Y has a lower PV at an interest rate of 5%, but has a higher PV at a 15% interest rate. Based on this data Investment X's has a higher present value based on the discount rate of 5% and Investment Y has the higher present value based on the discount rate of 15%. Question #20:You want to buy a new sports coupe for $79,500, and the finance office at the dealership has quoted you an APR of 5.8 percent for a 60-month loan to buy the car. What will your monthly payments be? What is the effective annual rate on this loan? Answer: Monthly payments... QUESTIONS AND PROBLEM SETS P= 4 r (PV ) 1(1+r )n Where r=5.8%/12=0.483% n=60 PV=79500 P= 0.483 (79500) 1(1+0.483 )60 =$1529.575 EAR = (1 + APR)^n - 1 EAR = (1+0.058/12)^12-1=5.96% Chapter Seven Questions Question #3: Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of 1,000, 23 years to maturity, and a coupon rate of 5.8 percent paid annually. If the yield to maturity is 4.7 percent, what is the current price of the bond? FV=1000 N=23 years R=4.7% QUESTIONS AND PROBLEM SETS 5 PMT=5.8%*1000=58 PV= 58[1 - 1/(1.058)23] / .058 + 1000 / (1.058)23 =1000 Question #11: Union Local School District has a bond outstanding with a coupon rate of 3.7 percent paid semiannually and 16 years to maturity. The yield to maturity on this bond is 3.9 percent, and the bond has a par value of $5,000. What is the price of the bond? Price of a bond= PV of annuity + PV of lump sum Coupon rate=3.7% T=16*2=32 Par value=5000 YTM=3.9%/2=1.95% PMT=(3.7%*5000)/2 1 1 - 1.0195 32 5,000 Bond Price 92.5 4881.80 0.0195 1.0195 32 =$4881.80 Chapter Eight Questions QUESTIONS AND PROBLEM SETS 6 Question #1:The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.95 per share on its stock. The dividends are expected to grow at a constant rate of 4 percent per year indefinitely. If investors require a return of 10.5 percent on The Jackson-Timberlake Wardrobe Co. stock, what is the current price? What will the price be in three years? In 15 years? P0 = D0(1+g) / (r - g) = (1.95*1.04) / (0.105 - 0.04) = $31.2 Dividend in 4 years = D0* (1+g)^4 D4=1.95(1.04)^3=$2.28 Price in 3 years: D4/(r - g) =$2.28/(0.105 - 0.04)=$35.08 Dividend in 16 years = D0* (1+g)^16 D16=1.95(1.04)^16=$3.65 Price in 15 years: D16/(r - g) =$3.65/(0.105 - 0.04) =$56.15 Question #6: Suppose you know that a company's stock currently sells for $63 per share and the required return on the stock is 10.5 percent. You also know that the total return on the QUESTIONS AND PROBLEM SETS 7 stock is evenly divided between a capital gains yield and a dividend yield. If it's the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share? Answer: $3.14(Chp 08_Problem 6_template_Danielle Hall) QUESTIONS AND PROBLEM SETS 8 References Jordan, B., Ross, S., &Westerfield R. (2016). Fundamentals of Corporate Finance (11th ed.). New York, NY: McGraw-Hill