Choose the right answer:

10- Suppose that you read in The Wall Street Journal that a bond has a coupon rate of 9 percent, a price of 71.375% (of face value) , and pays interest annually. Rounded to the nearest whole percent, what would be the bonds current yield?

A. 11%

B.13%

C. 15%

D. 17%

E. 20%

11- A 12-year bond has a 9 percent annual coupon, a yield to maturity of 8 percent, and a face value of $1,000. What is the price of the bond?

A.$1,469

B.$1,000

C.$ 928

D.$1,075

E.$1,957

12. Tuttle Enterprises is considering a project that has the following cash flow and WACC data. What is the project's NPV? Note that if a project's projected NPV is negative, it should be rejected.

WACC: 12.00%

Year 0 1 2 3 4

Cash flows -$1,000 $350 $350 $350 $350

a. $77.49

b. $81.56

c. $63.05

d. $90.15

e. $94.66

13. Resnick Inc. is considering a project that has the following cash flow data. What is the project's payback?

Year 0 1 2 3

Cash flows -$350 $200 $200 $200

a. 1.42 years

b. 1.58 years

c. 1.75 years

d. 1.93 years

e. 2.12 years

14. How much would $5,000 due in 25 years be worth today if the discount rate were 5.0%?

a. $1,476.52

b. $1,124.16

c. $1,183.33

d. $1,245.61

e. $1,311.17

15. Bosio Inc.'s perpetual preferred stock sells for $97.50 per share and it pays an $8.50 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of 4.00% of the price paid by investors. What is the company's cost of preferred stock for use in calculating the WACC?

a. 8.72%

b. 9.08%

c. 9.44%

d. 9.82%

e. 10.22%