Fin 3000-version 4 Topstone Industries is expected to pay a dividend of $1.50 per share in one year. This dividend is expected to grow at a rate of 3% forever. The current market price for a share of Topstone is $10. What is the expected capital gains yield on this stock? A, 20% B.3% C. 22% D. 18% E. none of the above oub1h500 n cne u borrow $10,000 you will have to pay back $10,500 in one year. What's the interest rate? 5.0% B. 5.5% C- 4.8% of the D. E. 5.2% 4.8% none of the above what is the annual percentage rate on a loan if the effective annual rate is 9% and the compounding is monthly? 3, A. 8.6% 9.0% 8.2% D. E. none of the above want to withdraw $40,000 at the endoteaa year and the interestrate is 2%? A. 32 years B. 31 years 4. You plan to have saved $1,000,000 for your retirement. How many years will that money last if you D. E. 35 years- 33 years none of the above 5-2% A stock with a beta of zero would be expected to: A. have a rate of return equal to the one. - B. have a rate of return equal to the risk-free rate. C. have a rate of return equal to the market rate. D. have a rate of return equal to zero. E one of the above 5. You borrow $1,200 from yourbank. The interest rate is 1% per month. How much will you have to pay back to the bank in one year? A. $1,352 B. $1,400 C. $1,329 D. $1,297 E. none of the above 6) FV7 3- Fin 3000-version 4 has had total returns over the past three years of 0%,7%, 2%. Kids Toy Co. What is your best guess about the next year's expected return? A. 3.0% 7 . D. E. 2.3% 2.0% none of the above 8. You borrow $20,000 to buy a car. You will have to repay this loan by making equal monthly payments for 6 years. The interest rate is 1% per month. How much is your monthly payment? A. $391 B $427 $368 D $411 E. none of the above Consider a stock that was bought a year ago for $20. The stock has paid a $2 dividend at the end of the year and its end of the year price was $23, What was the capital gains yield on this stock for the last year? A. 10% B. 15% 9. C.20% D.5% E. none of the above 10. Consider the following information for the next year's return on stock A Probability Return 0.6 0.4 -10% 20% What is the expected return? A.5% B.2% .896 D. 10% E none of the above Deryl is saving money for his retirement. Beginning one month from now, he will begin depositing a fixed amount into a retirement account that will earn 12% compounded monthly. He will make 360 such deposits. Then, one month after making his final deposit, he will start withdrawing $8,000 monthly for 25 years. The fund will continue to earn 12% compounded monthly How large should Dery's monthly deposits be to achieve his retirement goal? A $190 B. $214 C. $200 D. $217 E. none of the above 11. Fin 3000 -version 4 What's the interest rate on a 10-year $9,000 loan that requires fxed annual payments of $1,0002 B. C. D. 1.9% 2.2%. 2.4% 2.0% none of the above 13. The long-term bonds of Topstone Industries have a face value of $1,000 and are currently selling for S900. The issue matures n 100s and has a coupon rate of 9% (n: a The coupons are paid semiannually. What is the yield to maturity? A. 10.65% B. 11.75% C. 5.32%- D. 10.00% E. none of the above 14. McGonigal's Meats, Inc. currently pays no dividends. The firm plans to pay its first dividend at the end of the 3rd year. The first dividend will be $1.00 and dividends are expected to grow at 5% thereafter Given a required return of 12%, what would you pay for the stock today? A $10.17 B $14.29 - C $11.39 D. $12.78 E. none of the above Treasury bills currently yield 5%. The expected return on the market portfolo is 8% What is the ma 8. 11% .896 D5% E none of the above KM-rf 8%- 16. Aportfolio has 50% of its funds in stock Aandses in stock The correlation between stocks A and B 5 0.5 Stock A's beta is 0.8 stock B's beta is 1.2 How much is the portfollo beta? A 0.8 B. 1.0 C. 1.1 D. 2.2 E none of the above You plan to save $5,000 per year for your newborn child's college expenses 17. year? A $192,634 B. $90,000 C $238,972 D. $206,507 E. none of the above