Please help with the attached

It is a combination of problem solving and multiple choice.

1. Watters Umbrella Corp. issued 15-year bonds 2 years ago at a coupon rate of 8.8 percent. The bonds make semiannual payments. If these bonds currently sell for 106 percent of par value, what is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) YTM % 2. Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of 1,000, 20 years to maturity, and a coupon rate of 7.8 percent paid annually. If the yield to maturity is 8.9 percent, what is the current price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Bond price 3. Assuming semiannual compounding, what is the price of a zero coupon bond with 20 years to maturity paying $1,000 at maturity if the YTM is (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.): a. Price of the Bond 5 percent $ b. 8 percent $ c. 11 percent $ 4. Ayden, Inc., has an issue of preferred stock outstanding that pays a dividend of $4.95 every year, in perpetuity. This issue currently sells for $94 per share. What is the required return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Required return % 5. Siblings, Inc., is expected to maintain a constant 6 percent growth rate in its dividends, indefinitely. The company has a dividend yield of 7.8 percent. What is the required return on the company's stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Required return % 6. The Starr Co. just paid a dividend of $1.60 per share on its stock. The dividends are expected to grow at a constant rate of 6 percent per year, indefinitely. Investors require a return of 10 percent on the stock. What is the current price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current price $ What will the price be in three years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Stock price $ What will the price be in 12 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Stock price $ 7. Zoom stock has a beta of 1.46. The risk-free rate of return is 3.07 percent and the market rate of return is 11.81 percent. What is the amount of the risk premium on Zoom stock? 9.59% 8.09% 17.24% 12.76% 10.25% 8. The risk premium for an individual security is computed by: dividing the market risk premium by the beta of the security. adding the risk-free rate to the security's expected return. multiplying the security's beta by the market risk premium. dividing the market risk premium by the quantity (1 + Beta). multiplying the security's beta by the risk-free rate of return. 9. The risk-free rate of return is 3.68 percent and the market risk premium is 7.84 percent. What is the expected rate of return on a stock with a beta of 1.32? 14.03% 9.24% 9.17% 13.12% 14.36% 10. Miller Manufacturing has a target debt-equity ratio of .50. Its cost of equity is 14 percent, and its cost of debt is 8 percent. If the tax rate is 38 percent, what is the company's WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) WACC % 11. Central Systems, Inc. desires a weighted average cost of capital of 10 percent. The firm has an after-tax cost of debt of 6 percent and a cost of equity of 14 percent. What debt-equity ratio is needed for the firm to achieve its targeted weighted average cost of capital? .83 1.10 1.17 1.00 .90 12. Filer Manufacturing has 4 million shares of common stock outstanding. The current share price is $83, and the book value per share is $8. The company also has two bond issues outstanding. The first bond issue has a face value $90 million, a coupon of 6 percent, and sells for 98 percent of par. The second issue has a face value of $60 million, a coupon of 7 percent, and sells for 106 percent of par. The first issue matures in 21 years, the second in 3 years. a. What are the company's capital structure weights on a book value basis? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.) Equity / Value Debt / Value = = b. What are the company's capital structure weights on a market value basis? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.) Equity / Value = Debt / Value = c. Which are more relevant? o Market value weights o Book value weights 13. Titan Mining Corporation has 9.3 million shares of common stock outstanding and 370,000 6 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $41 per share and has a beta of 1.15, and the bonds have 20 years to maturity and sell for 112 percent of par. The market risk premium is 8.1 percent, T-bills are yielding 4 percent, and the company's tax rate is 40 percent. a. What is the firm's market value capital structure? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.) Debt = Weight Equity = b. If the company is evaluating a new investment project that has the same risk as the firm's typical project, what rate should the firm use to discount the project's cash flows? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Discount rate % 1. The difference between the present value of an investment's future cash flows and its initial cost is the: internal rate of return. net present value. profitability index. payback period. discounted payback period. 2. Which statement concerning the net present value (NPV) of an investment or a financing project is correct? Any type of project with greater total cash inflows than total cash outflows, should always be accepted. A financing project should be accepted if, and only if, the NPV is exactly equal to zero. An investment project should be accepted only if the NPV is equal to the initial cash flow. An investment project that has positive cash flows for every time period after the initial investment should be accepted. Any type of project should be accepted if the NPV is positive and rejected if it is negative. 3. The primary reason that company projects with positive net present values are considered acceptable is that: they create value for the owners of the firm. the project's rate of return exceeds the rate of inflation. they return the initial cash outlay within three years or less. the required cash inflows exceed the actual cash inflows. the investment's cost exceeds the present value of the cash inflows 4. Accepting a positive net present value (NPV) project: ignores the inherent risks within the project. indicates the project will pay back within the required period of time. means the present value of the expected cash flows is equal to the project's cost. guarantees all cash flow assumptions will be realized. is expected to increase the stockholders' value by the amount of the NPV. 5. The net present value method of capital budgeting analysis does all of the following except: provide a specific anticipated rate of return. use all of a project's cash flows. incorporate risk into the analysis. discount all future cash flows. consider all relevant cash flow information. 6. What is the net present value of a project with an initial cost of $36,900 and cash inflows of $13,400, $21,600, and $10,000 for Years 1 to 3, respectively? The discount rate is 13 percent. $1,195.12 $1,350.49 $287.22 $204.36 $797.22 7. Maxwell Software, Inc., has the following mutually exclusive projects. Year 0 1 2 3 Project A -$24,000 14,000 10,500 3,300 Project B -$27,000 15,000 11,500 10,500 a-1. Calculate the payback period for each project. (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) Payback period Project A years = Project B years = a-2. Which, if either, of these projects should be chosen? o o o o Project A Project B Both projects Neither project b-1. What is the NPV for each project if the appropriate discount rate is 17 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) NPV Project A $ Project B $ b-2. Which, if either, of these projects should be chosen if the appropriate discount rate is 17 percent? o o o o Project A Project B Both projects Neither project 8. Flatte Restaurant is considering the purchase of a $9,200 souffl maker. The souffl maker has an economic life of five years and will be fully depreciated by the straight-line method. The machine will produce 1,600 souffls per year, with each costing $2.40 to make and priced at $4.85. Assume that the discount rate is 10 percent and the tax rate is 40 percent. What is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV $ Should the company make the purchase? o No o Yes 9. The Best Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated here. The corporate tax rate is 40 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project. Year 0 Investment $ Year 1 34,000 Year 2 Sales revenue $ 18,500 $ 15,500 Operating costs 3,900 3,100 Depreciation 8,500 8,500 Net working capital spending 400 ? Year 3 17,500 Year 4 $ 18,000 3,700 3,800 8,500 8,500 400 450 $ 500 a. Compute the incremental net income of the investment for each year. (Do not round intermediate calculations.) Year 1 Net income $ $ $ $ Year 2 Year 3 Year 4 b. Compute the incremental cash flows of the investment for each year. (Do not round intermediate calculations. A negative answer should be indicated by a minus sign.) Year 0 Cash flow $ $ $ $ $ Year 1 Year 2 Year 3 Year 4 c. Suppose the appropriate discount rate is 10 percent. What is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV $