Can anyone help me financial questions?

1. If its yield to maturity is less than its coupon rate, a bond will sell at a _____, and increases in yield to maturity will ____ a. discount; increase bond price.

1. b. discount; decrease bond price
2. c. premium; increase bond price.
3. d. premium; decrease bond price
4. e. None of the above.

2. A stock is expected to pay a dividend of $0.75 in the next year. The required rate of return is rs = 10.5%, and the expected constant growth rate is g = 6.4%. What should be the fair value of the stock?

a. $17.39

b. $17.84

c. $18.29

d. $18.75

e. $19.46

3. Which of the following statements concerning the effective annual rate are correct?

I. When lending and choosing which investment to accept, you should select the offer with the highest effective annual rate

II. The more frequently interest is compounded, the higher the effective annual rate.

III. A quoted rate of 6% compounded per second has a higher effective annual rate than if the rate were compounded daily.

IV. When making financial decisions, you should compare effective annual rates rather than annual percentage rates.

a) I and II only

b) I and IV only

c) I, II, and III only

d) II, III, and IV only

e) I, II, III, and IV

4. The goal of the financial manager of a corporation should be

a) To maximize the number of capital budgeting projects undertaken.

b) To maximize net income on the income statement.

c) To maximize the long-term market value of the stock.

d) To maximize earnings per share.

e) To maximize market share while maintaining steady earnings growth.

5. Hart Enterprises recently paid a dividend of $1.25. It expects to have a dividend growth rate of 15% for 3 years followed by a constant rate of 6% thereafter. The firms required return is 10%. What is the firms stock value today?

6. A 10-year bond that pays coupon semi-annually at a coupon rate of 9% is priced at $ 900 at its issuance. What is the Yield to Maturity of the Bond? If it is called back 3-years after the issuance will a call premium of 5%. What is its Yield to Call?

7. Le Sun's has sales of $3,000, total assets of $2,500, and a profit margin of 5%. The firm has an equity multiplier of 2.5. What is the return on equity? Hint: Use DuPont Method

8. You are buying a house priced at $354,125. You plan to pay 20% of the price for down payment and finance the rest. The mortgage loan you need to borrow lasts 30 years and requires 4.25% interest rate per annum. What is your payment EACH MONTH for the mortgage loan?

9. You need to borrow money and you are considering two loans. The terms of the two loans are equivalent with the exception of the interest rates. Loan A offers a stated rate of 3.125% compounded monthly. Loan B offers a stated rate of 3.15% compounded semi-annually. What are the effective annual rates for the loans? Which one do you prefer?

10. An investment prefers to pay $2000 at the end of the first year, and then $3500 for year 2, year 3 and year 4. If the interest rate is 10%, what is the value of this investment to you? Hint: Use the NPV function.

11. A share of a preferred equity offers $3.00 per year for perpetuity. What is the value of this preferred share to you if the interest rate is 5%?

12. Assume that you just graduate and get a job. You will work for 40 years and save each year before you retire. During retirement you plan to receive a pension annuity of $100,000 each year for another 40 years. How much money will you need to have at the moment you retire? How much money do you need to save every year before retirement?

Assume the interest rate is always 8%. Before retirement, you deposit your saving at the end of each year. During retirement, you receive the annuity at the beginning of each year.