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Hello, I need help with the attached Corporate Finance questions. Please and thank you! Question 1 Healthy Foods just paid its annual dividend of $1.45
Hello,
I need help with the attached Corporate Finance questions.
Please and thank you!
Question 1 Healthy Foods just paid its annual dividend of $1.45 a share. The firm recently announced that all future dividends will be increased by 2.8 percent annually. What is one share of this stock worth to you if you require a 14 percent rate of return? $12.56 $12.95 $13.31 $13.68 $14.07 Question 2 The common stock of Tasty Treats is valued at $10.80 a share. The company increases its dividend by 8 percent annually and expects its next dividend to be $0.20 per share. What is the total rate of return on this stock? 8.64 percent 9.12 percent 9.40 percent 9.85 percent 10.64 percent Question 3 The common stock of Green Garden Flowers is selling for $24 a share. The company pays a constant annual dividend and has a total return of 3.8 percent. What is the amount of the dividend? $0.38 $0.76 $0.91 $1.38 $1.54 Question 4 Pluto, Inc., has an issue of preferred stock outstanding that pays a $4.50 dividend every year, in perpetuity. If this issue currently sells for $82.30 per share, what is the required return? 5.47 percent 6.89 percent 7.70 percent 8.23 percent 8.98 percent Question 5 Plastics, Inc. will pay an annual dividend of $1.85 next year. The company just announced that future dividends will be increasing by 2.25 percent annually. How much are you willing to pay for one share of this stock if you require a 16 percent return? $13.45 $13.61 $13.76 $14.02 $14.45 Question 6 Western Beef stock is valued at $62.10 a share. The company pays a constant annual dividend of $4.40 per share. What is the total return on this stock? 6.62 percent 6.81 percent 7.09 percent 7.49 percent 7.82 percent Question 7 Investors receive a total return of 13.7 percent on the common stock of Dexter International. The stock is selling for $41.68 a share. What is the dividend growth rate if the company plans to pay an annual dividend of $2.10 a share next year? 7.42 percent 8.66 percent 10.75 percent 11.60 percent 13.70 percent Question 8 Blackwell Ink is losing significant market share and thus its managers have decided to decrease the firm's annual dividend. The last annual dividend was $0.90 a share but all future dividends will be decreased by 5 percent annually. What is a share of this stock worth today at a required return of 15 percent? $4.07 $4.28 $4.49 $4.72 $4.95 Question 9 Better Plastics is a mature manufacturing firm. The company just paid a $4 annual dividend, but management expects to reduce the payout by 3 percent per year, indefinitely. If you require a 12 percent return on this stock, what will you pay for a share today? $23.09 $25.87 $27.14 $28.56 $30.02 Question 10 Lamey Headstones increases its annual dividend by 1.5 percent annually. The stock sells for $28.40 a share at a required return of 14 percent. What is the amount of the last dividend this company paid? $3.50 $3.55 $3.60 $3.65 $3.70 Question 11 If Treasury bills are currently paying 4.2 percent and the inflation rate is 2.6 percent, what is the approximate real rate of interest? The exact real rate? 1.60 percent; 1.56 percent 1.60 percent; 1.64 percent 6.80 percent; 6.67 percent 6.80 percent; 6.87 percent 6.80 percent; 6.92 percent Question 12 The 7 percent annual coupon bonds of TPO, Inc. are selling for $1,021. The bonds have a face value of $1,000 and mature in 6.5 years. What is the yield to maturity? 6.42 percent 6.59 percent 6.63 percent 6.68 percent 6.70 percent Question 13 The 8 percent, $1,000 face value bonds of Glenmore Foods are currently selling at $1,027. These bonds have 16 years left until maturity. What is the current yield? 7.71 percent 7.79 percent 8.00 percent 8.23 percent 8.28 percent Question 14 Smiley Industrial Goods has bonds on the market making annual payments, with 13 years to maturity, and selling for $1,095. At this price, the bonds yield 6.4 percent. What must the coupon rate be on these bonds? 6.67 percent 6.84 percent 7.23 percent 7.50 percent 7.83 percent Question 15 A 6 percent bond has a yield to maturity of 6.5 percent. The bond matures in 7 years, has a face value of $1,000, and pays semiannual interest payments. What is the amount of each coupon payment? $30.00 $32.50 $60.00 $62.50 $65.00 Question 16 A bond has a 7 percent coupon rate, a face value of $1,000, semiannual payments, and sells at par. The current yield is _____ percent and the effective annual yield is _____ percent. 6.76; 6.87 6.76; 6.96 7.00; 7.00 7.00; 7.12 7.23; 7.23 Question 17 A bond has a par value of $1,000, a current yield of 7.606 percent, and semi-annual interest payments. The bond quote is 98.6. What is the amount of each coupon payment? $32.50 $37.50 $38.03 $72.31 $75.00 Question 18 If your nominal rate of return is 14.38 percent and your real rate of return is 3.97 percent, what is the inflation rate? 8.47 percent 10.01 percent 10.54 percent 18.35 percent 18.92 percent Question 19 A 5.5 percent $1,000 bond matures in 7 years, pays interest semiannually, and has a yield to maturity of 6.23 percent. What is the current market price of the bond? $945.08 $947.21 $959.09 $959.60 $962.40 Question 20 Which one of the following refers to the relationship between nominal returns, real returns, and inflation? Call premium Fisher effect Conversion ratio Bid-ask spread Clean-dirty spread Question 21 A project has expected cash inflows, starting with year 1, of $2,200, $2,900, $3,500 and finally in year four, $4,000. The profitability index is 1.14 and the discount rate is 12 percent. What is the initial cost of the project? $7,899.16 $8,098.24 $8,166.19 $9,211.06 $9,250.00 Question 22 A firm is reviewing a project that has an initial cost of $71,000. The project will produce annual cash inflows, starting with year 1, of $8,000, $13,400, $18,600, $33,100 and finally in year five, $37,900. What is the profitability index if the discount rate is 11 percent? 0.92 0.98 1.02 1.07 1.12 Question 23 Services United is considering a new project that requires an initial cash investment of $75,000. The project will generate cash inflows of $26,500, $32,700, $18,500, and $10,000 over each of the next four years, respectively. How long will it take to recover the initial investment? 2.74 years 2.85 years 2.99 years 3.27 years 3.68 years Question 24 Miller Brothers is considering a project that will produce cash inflows of $61,500, $72,800, $84,600, and $68,000 a year for the next four years, respectively. What is the internal rate of return if the initial cost of the project is $225,000? 9.39 percent 10.22 percent 11.47 percent 11.62 percent 12.24 percent Question 25 The Black Horse is currently considering a project that will produce cash inflows of $12,000 a year for three years followed by $6,500 in year four. The cost of the project is $38,000. What is the profitability index if the discount rate is 7 percent? 0.96 0.99 1.04 1.09 1.12 Question 26 Which one of the following defines the internal rate of return for a project? Discount rate that creates a zero cash flow from assets Discount rate which results in a zero net present value for the project Discount rate which results in a net present value equal to the project's initial cost Rate of return required by the project's investors The project's current market rate of return Question 27 What is the net present value of a project that has an initial cost of $40,000 and produces cash inflows of $8,000 a year for 11 years if the discount rate is 15 percent? $798.48 $1,240.23 $1,869.69 $2,111.41 $2,470.01 Question 28 Professional Properties is considering remodeling the office building it leases to Heartland Insurance. The remodeling costs are estimated at $3.4 million. If the building is remodeled, Heartland Insurance has agreed to pay an additional $820,000 a year in rent for the next 5 years. The discount rate is 15 percent. What is the benefit of the remodeling project to Professional Properties? -$651,233 -$489,072 $5,214 $128,399 $311,417 Question 29 Curtis is considering a project with cash inflows of $918, $867, $528, and $310 over the next four years, respectively. The relevant discount rate is 11 percent. What is the net present value of this project if it the start up cost is $2,100? $20.98 $46.48 $52.14 $74.22 $80.81 Question 30 The profitability index reflects the value created per dollar: invested. of sales. of net income. of taxable income. of shareholders' equityStep by Step Solution
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