. If you own 15,000 shares of stock of Brookfield Asset Management and it pays a dividend of $0.18 per share, then what is the total dividend you will receive? 2. You own 20% of the stock of a company with 10 directors on its board. How much representation can you get on the board if the company has cumulative voting? How much representation can you ensure if the company has straight voting? 3. Anzio Inc. has two classes of shares. Class B has 10 times the voting rights of Class A. If you own 10% of the Class A shares and 20% of the Class B shares, what percentage of the total voting rights do you hold? 4. Consider a 10-year Government of Canada bond with a face value of $1000 that has a coupon rate of 5.5%, with semi-annual payments. a. What is the coupon payment for this bond? b. Draw the cash flows for the bond on a timeline. 5. Assume that a bond will make payments every six months as shown on the following timeline (using six-month periods): 6. a. What is the maturity of the bond (in years)? b. What is the coupon rate (as a percentage)? c. What is the face value? 7. You are thinking about investing $5000 in your friends landscaping business. Even though you know the investment is risky and you cant be sure of the outcome, you expect your investment to be worth $5750 next year. You notice that the rate for one-year treasury bills is 1%. However, you feel that other investments of equal risk to your friends landscape business offer a 10% expected return for the year. What should you do? 8. You have invested in a business that proudly reports that it is profitable. Your investment of $5000 has produced a profit of $300. The managers think that if you leave your $5000 invested with them, they should be able to generate $300 per year in profits for you in perpetuity. Evaluating other investment opportunities, you note that other long-term investments of similar risk offer an expected return of 8%. Should you remain invested in this firm? 9. Suppose the Bank of Montreal is offering a 30-year mortgage with an EAR of 6.80%. If you plan to borrow $150,000, what will your monthly payment be? 10. You have decided to refinance your mortgage. You plan to borrow whatever is outstanding on your current mortgage. The current monthly payment is $2356, and you have made every payment on time. The original term of the mortgage was 30 years, and the mortgage is exactly 4 years and 8 months old. You have just made your monthly payment. The mortgage interest rate is 6.2% (APR with semi-annual compounding). How much do you owe on the mortgage today? 11. You have just sold your house for $1,000,000 in cash. Your mortgage was originally a 30-year mortgage with monthly payments and an initial balance of $800,000. The mortgage is currently exactly 18.5 years old, and you have just made a payment. If the interest rate on the mortgage is 7.75% (APR with semi-annual compounding), how much cash will you have from the sale once you pay off the mortgage? 12. You have just purchased a home and taken out a $500,000 mortgage. The mortgage has a 30-year term with monthly payments and an APR (with semi-annual compounding) of 6.5%. a. How much will you pay in interest, and how much will you pay in principal, during the first year? b. How much will you pay in interest, and how much will you pay in principal, during the 20th year (i.e., between 19 and 20 years from now)? 13. Consider the loan from the previous question: a 60-month, $50,000 car loan with a 6% APR, compounded monthly. Assume that right after you make your 50th payment, the balance on the loan is $9405.81. How much of your next payment goes toward principal and how much goes toward interest? Compare this with your answers in the last questionwhat is happening? 14. You have some extra cash this month and are considering putting it toward your car loan. Your interest rate is 7%, your loan payments are $600 per month, and you have 36 months left on your loan. If you pay an additional $1000 with your next regular $600 payment (due in one month), how much will it reduce the amount of time left to pay off your loan? 15. Assume you graduate from university with a $30,000 student loan. If your interest rate is fixed at 4.66% APR with monthly compounding and you will repay the loan over a 10-year period, what will be your monthly payment? 16. What is the most important type of decision that the financial manager makes? 17. Why do all shareholders agree on the same goal for the financial manager? Part 2 (Interrogative Case)

This case draws on material from this and earlier chapters.

Adam Rust looked at his mechanic and sighed. The mechanic had just pronounced a death sentence on his road-weary car. The car had served him wellat a cost of $500 it had lasted through four years of university with minimal repairs. Now, he desperately needs wheels. He has just graduated and has a good job at a decent starting salary. He hopes to purchase his first new car. The car dealer seems very optimistic about his ability to afford the car payments, another first for him.

The car Adam is considering is a $35,000 Audi. The dealer has given him three payment options:

1. ZERO-PERCENT FINANCING. Make a $4000 down payment from his savings and finance the remainder with a 0% annual percentage rate (APR) loan for 48 months. Adam has more than enough cash for the down payment, thanks to generous graduation gifts. 2. REBATE WITH NO MONEY DOWN. Receive a $4000 rebate, which he would use for the down payment (and leave his savings intact), and finance the rest with a standard 48-month loan, with an 8% APR with monthly compounding. 3. PAY CASH. Get the $4000 rebate and pay the rest with cash. While Adam doesnt have $35,000, he wants to evaluate this option. His parents always paid cash when they bought a family car; Adam wonders if this really was a good idea.

Adams fellow graduate, Jenna Hawthorne, was lucky. Her parents gave her a car for graduation. Okay, it was a little Hyundai, and definitely not her dream car, but it was serviceable, and Jenna didnt have to worry about buying a new car. In fact, Jenna has been trying to decide how much of her new salary she could save. Adam knows that with a hefty car payment, saving for retirement would be very low on his priority list. Jenna believes she could easily set aside $3000 of her $45,000 salary. She is considering putting her savings in a stock fund. She just turned 22 and has a long way to go until retirement at age 65, and she considers this risk level reasonable. The fund she is looking at has earned an average of 9% over the past 15 years and could be expected to continue earning this amount, on average. While she has no current retirement savings, five years ago Jennas grandparents gave her a new 30-year Government of Canada bond with a $10,000 face value.

Jenna wants to know her retirement income if she both (1) sells her bond at its current market value and invests the proceeds in the stock fund and (2) saves an additional $3000 at the end of each year in the stock fund from now until she turns 65. Once she retires, Jenna wants those savings to last for 25 years until she is 90.

Both Adam and Jenna need to determine their best options.