I attached the document with questions I am trying to solve. Thank you for your help!

17) Prices and yields. A six-year government bond makes annual coupon payment of 5% and offers a yield of 3% annual compounded. Suppose that one year later the bond still yields 3%. A. What return has the bondholder earned over the 12 month period? Now suppose that the bond yields 2% at the end of the year. B. What we turn did the bondholder earn in this case? 28) Nominal and real returns. suppose that you buy a two year 8% bond at it's face value. A. What will be your total nominal return over the two years if inflation is 3% in the first year and 5% in the second? What will be your real return? B. Now suppose that the bond is a TIPS. What will be your total 2-year real and nominal returns? 29) Bond rating. A bonds credit rating provides a guide to its price. As we write this in earlier 2015, Aaa bonds yield 3.4% and be a Baa bonds yield 4.4%. If some bad news causes 10% five year bond to be unexpectedly downrate from Aaa to Bbb what would be the effect on the bond price? (assume in your coupons) 32) Find the arbitrage opportunity (opportunities?). Assume for simplicity that coupons are paid annually. In each case the face value of the bond is 1,000. 25) DCF and free cash flow. Permian Partners (PP) produces from aging oil fields in West Texas. Production is 1.8 million barrels per year in 2016, but production is declining at 7% per year for the foreseeable future. Cost of production, transportation, and administration add up to $25 per barrel. The average oil price was $65 per barrel in 2016. PP has 7 million shares outstanding. The cost of capital is 9%. All of the PP's net income is distributed as dividends. For simplicity, assume that the company will stay in business forever and that cost per barrel are constant at $25. Also, ignore taxes. A. What is the ending 2016 value of one PP share? Assume that oil prices are expected to fall to $60 per barrel in 2017, $55 per barrel in 2018, and $50 per barrel in 2019. After 2019, assume a longterm trend of oil price increases at 5% per year. B. What is PP's EPS/P ratio and why is it not equal to the 9% cost of capital? 27) Valuing free cash flow. Mexican motors market cap is 200 billion pesos. Next year's free cash flow is 8.5 billion pesos. Security analyst are forecasting that free cash flow will grow by 7.5% per year for the next five years. A. Assume that the 7.5% growth rate is expected to continue forever. What rate of return our investors expecting? B. Mexican motors has generally earned about 12% on book equity (ROE= 12%) and reinvested 50% of earnings. The remaining 50% of earnings has gone to free cash flow. Suppose the company maintains the same ROE and investment rate for the long run. What is the implication for the growth rate of earnings and free cash flow? For the cost of equity? Should you revise your answer to part (a) of this question? 29) Constant-Growth DCF formula. The constant growth DCF formula: Is sometimes written as: Where BVPS is book equity value per share, b is the plow back ratio, and ROE is the ratio of earnings per share to be BVPS. Use this equation to show how the book-to-price ratio varies as our ROE changes. What is price-to-book when are ROE = r? 30) DCF valuation. Portfolio managers are frequently paid a proportion of the funds under management. Suppose you manage a $100 million equity portfolio offering a dividend yield (DIV (subscript 1) / P (subscript 0)) of 5%. Dividends and portfolio value are expected to grow at a constant rate. Your annual fee for managing this portfolio is .5% of portfolio value and is calculated at the end of each year. Assuming that you will continue to manage the portfolio from now to eternity, what is the present value of the management contract? How would the contract value change if you invested in stocks with a 4% yield? #7 Capital rationing. Suppose you hav e the following investment opportunitiies, but only $90,000 available for investment. Which projects should you take? #8 Payback. Consider the following projects: A) If the opportunity cost of capital is 10%, which projects have a positive in NPV? B) Calculate the payback period for each project. c) Which project(s) would a firm using the payback rule accept if the cutoff period were 3 years? d) Calculate the discounted payback period for each project. #9 Payback and IRR rules. Respond to the following comments: A. \"I like the IRR rule. I can use it to rank projects without having to specify a discount rate.\" B. \"I like the payback rule. As long as the minimum payback period is short, the rule make sure that the company takes no borderline projects. That reduces risk.\" 11 IRR rule. Consider the following two mutually exclusive projects: a) Calculate the NPV of each project for discount rate of 0%, 10%, and 20%. What these on a graph with NPV on the vertical axis and discount rate on the horizontal axis. #16 Project NPV and IRR A project requires an initial investment of $100,000 and is expected to produce a cash inflow before tax of $26,000 per year for five years. Company A has substantial accumulated tax losses and is likely to pay taxes in the foreseeable future. Company B pays corporate taxes at a rate of 35% and can depreciate the investment for tax purposes using the five-year tax MACRS tax depreciation schedule. Suppose the opportunity cost of capital is 8%. Ignore inflation. A. Calculate project in NPV for each company. #29 Equivalent annual cost. The Borstal company has to choose between two machines that do the same job but have different lives. The two machines have the following costs: The costs are expressed in real terms. A. Suppose you are Borstal's financial manager. If you had to buy one or the other machine and rent it to the product manager for that machines economic life, what annual rental payment would you have to charge? Assume a 6% real discount rate and ignored taxes. B. Which machine should Borstal buy? C. Usually the rental payments are derived in part (a) are just hypothetical- A way of calculating and interpreting equivalent annual cost. Suppose you actually do buy one of the machines and rent it to the product manager. How much would you actually have to charge in each future year if there is steady 8% per year inflation? (Note: The rental payment calculator in part (a) are real cash flows. You would have to mark up those payments to cover inflation.)