EXHIBITS:

Email from Analyst To: Maud Hemingway, Accountant From: Beth Nolan, Analyst RE: Valuation Metrics Hi Maud, Per your request, I have gathered the following metrics for valuing our stock and bond: Treasury bill rate 0.4% Company beta 1.1 Please contact me if you have further questions. Regards, BethEmail from Accounting Manager To: Maud Hemingway, Accountant From: Mark Randall, Accounting Manager RE: Valuation Estimates Hi Maud, To calculate the expected return from our stock and bond, please use the following assumptions: 1. Bonds are issued at par regardless of the state of economy. 2. The bond coupon rate is 1.5% higher than the treasury bill rate when the economy is normal. 3. During recession, the bond coupon rate would be 15% higher than when the economy is normal. During expansion, the bond coupon rate would be 10% lower than when the economy is normal. 4. Market rate for stock is 3.2% when the economy is normal, 4.2% during expansion, and 2.4% during recession. Thank you, MarkStates of Economy State of Economy Probability Recession 20% Normal 60% Expansion 20%close all EXHIBITS exhibits Email from Analyst Email from Accounting Manager States of Economy Based on the information provided in the exhibits, enter the appropriate amounts in the associated cells. Round interim calculations and final results to the nearest hundredth. Stock Bond FORMATTED RESPONSE 1. Rate of return during recession (%) 123 123 2. Rate of return when the economy is normal (%) 123 123 RESET CANCEL ACCEPT 3. Rate of return during expansion (%) 123 123 4. Expected return (%) 123 123 5. Standard deviation (%) 123 123 6. Coefficient of variance 123 123