1. Company Xs bonds have 25 years remaining to maturity. They have a $1,000 par value, the coupon interest rate is 7%, and the yield to maturity is 10%. If you know that interest is paid annually, what is the bonds current market price?
   1. $ 658.32
   2. $ 727.69
   3. $ 872.58
   4. $ 987.78
   5. $ 1,000

2. Najd company decided to issue preferred stock that would pay an annual dividend of $10.00 and that the issue price was $200.00 per share. What would be the preferred stock's expected return?

1. 2%
2. 2.5%
3. 3%
4. 4%
5. 5%

3. Which of the following items is not a capital component when we calculate the WACC?
   1. Preferred stock
   2. Long-term debt
   3. Retained earnings
   4. Common stock
   5. Net capital spending/capital expenditure

4. Assume that you were hired as a financial consultant for SABIC. You have been provided with the following information: D₁ = $1.45; P₀ = $22.50; and g = 6.50% (constant). Based on the DCF approach, what is the cost of equity for SABIC?
   1. 11.10%
   2. 11.68%
   3. 12.30%
   4. 12.94%
   5. 13.59%
5. Al kharj Mall estimates that its WACC = 10.5%. The Mall is considering the following capital budgeting projects :

Project Size Rate of Return

A $1M 12%

B $2M 11.5%

C $2M 11.2%

D $2M 11%

E $1M 10.7%

F $1M 10.3%

G $1M 10.2%

Which set of projects should be accepted:

1. Projects A and B only.
2. Projects A, B, and C only.
3. Projects A, B, C, and D only.
4. Projects A, B, C, D, and E only.
5. Projects F and G only.