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QUESTION 1 If the nominal rate of return on a corporate bond is 13%, the risk premium is 6%, and the inflation premium is 4%,
QUESTION 1 If the nominal rate of return on a corporate bond is 13%, the risk premium is 6%, and the inflation premium is 4%, what is the pure rate of interest? a. 3.00% 5.0.00% c. 2.50% O d. 10.24% QUESTION 2 DiFiore Corporation's $100 face value fixed-rate preferred stock pays an annual dividend of $7.50 per share. What is the value of one share of this stock to an investor who requires a rate of return of 9.50%? O a. S 71.25 b. $ 100.00 OC $78.95 d. Cannot determine from the data given. QUESTION 3 In forecasting a company's balance sheet, the CFO projected total assets of 54.28 million and total liabilities and equity of $3.96 million BEFORE balan cing the balance sheet. To complete the pro forma balance sheet, the CFO must: a. Include $8.34 million of excess cash. b. Include $8.24 million of external financing needed (EFN). O c. Include $0.32 million of excess cash. d. Include $0.32 million of external financing needed (EFN)
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