Please answer each of these.

Question 6 You have gathered the following information about your firm:

Current Stock Price (Common) ==> $46

Forecasted Dividend (D1) ==> $2.66

Beta ==> 1.2

YTM on Debt ==> 7.57%

Coupon Rate on Debt ==> 6.08%

Treasury Bond Yield ==> 4.7%

Growth Rate on Dividends ==> 4.5%

Expected Return on the Market ==> 10.33%

Risk Premium for Stocks over Bonds ==> 3.2%

Based on this, estimate the cost of common stock financing based on the dividend valuation approach. Round to 2 decimal places in percentage terms.

Question 22 You plan to save the following amounts

$4054 today

$5954 per year for the next 3 years

$7552 per year for the following 1 years

$13144 per year for the following 2 years

$12673 per year for the final 2 years

Assuming you earn a 7.1% rate of return during the entire period, how much will you have at the END of the time horizon? Round answer to the nearest dollar.

Question 23 Risk aversion means that when given a choice between two investments, an investor will always choose the investment that has the lowest risk.

True

False

Question 24 A forward rate

Will always be higher than the current spot rate

Refers to a currency transaction that takes place today

Refers to a currency transaction where the exchange takes place today, but the final exchange rate is set at a later date

Refers to a currency transaction where the exchange rate is set today, but the exchange takes place at a later date.

Will always be lower than the current spot rate

Question 25 The expected rate of return on a Roth IRA is

10%-12%

6%-8%

4%-6%

8%-10%

A Roth IRA is a tax-shelter, not a type of investment. The expected rate of return depends on what invesment you put in your Roth IRA

Question 26 You plan to retire in 14 years. At the point of retirement, you want to be able to withdraw $33067 at the end of each year forever. Assume that you earn a 8.59% rate of return prior to retirement and an 6.8% rate of return after retirement. If you do not want to make any further contributions to your retirement fund, how much do you need today? Round answer to the nearest dollar.

Question 27 Your firm plans to issue preferred stock with a par value of $100 per share. Assuming the preferred has a dividend rate of 5.53% and is expected to sell for $107.32 per share, what is the cost of preferred stock financing? Round your answer to 2 decimal places in percentage terms.

Question 28 Financial Markets work best connecting suppliers and demanders of capital when ____. This is a multiple answer format question which may have more than one correct answer -- check all that apply.

The securities are homogeneous

The securites need transformed so that the security issued by the demander of capital is different than the security purchased by the supplier of capital

There are many potential buyers and sellers

Question 29Which of the following activities would likely increase earnings but not change cash flows (ignore tax consequences)? This is a multiple answer format question which means you should check all that apply...there may be more than one correct response.

An increase in the average selling price of our product (assume costs are unchanged and units sold are not affected)

An increase in the average number of years over which equipment is depreciated

A decrease in the average number of years over which equipment is depreciated

Question 30 Find the value of a 5.6% Coupon Bond with a required return of 12.29% and 10 years to maturity.