1. CJA Corporation issued a 5-year, P5,500,000 face value bonds. The bond has a coupon rate of 8%. The effective interest rate of this bond issuance is 9%. What is the value of the bonds as of issuance date?
2. CJA Stock assures investors a yearly dividend of P210. Generally, investors require a 14% return from CJA. What would the value of the stock be after five years?
3. The stock of CJA Golf World currently sells for P90 per share. The firm has a constant dividend growth rate of 6% and just paid a dividend of P5.09. You are unsure about the stock's required rate of return. What will the stock sell for one year from now?
4. A company currently has 20-year bonds outstanding. The bonds have an 8.5 percent annual coupon, a face value of P1,000, and they currently sell for P945. The tax rate is 30%. The company's after-tax cost of debt is closest to?
5. CJA Corporation issued 10,000 pieces of 9%, P1,000 par value preferred shares through an underwriter. The underwriter collected P10,500,000 but charged a fee of P200,000. What is the effective cost of the preferred shares?
6. The risk-free rate and the expected market rate of return are 6% and 12%, respectively. According to the capital asset pricing model (CAPM), the expected rate of return on security X with a beta of 1.2 is equal to?
7. The company-issued bonds yield 10% while the treasury bonds yield 7%. Overall, the market provides a return of 18%. Company investors, however, determined that they are willing to accept at least 9% higher returns than their creditor counterpart in the company. Using the bond yield plus risk premium, what is the expected return of the investors?
8. CJA Inc. has P5,000,000 total assets. It has a debt ratio of 40%. Shareholders expected an 18% return on investment while the effective interest rate of its debt is 8%. Current liabilities are immaterial. Tax rate is at 30%. The weighted average cost of capital of CJA is closest to?