QUESTION 5 !!

Finance 3000 Final Review Workshop Question 1. Your workshop instructor is planning on saving up for retirement over the next 40 years. To do this he'll invest $750 per month in a stock account and $250 per month in a bond account. The return on the stock account is 10% compounded monthly and the return on the bond account is 6% compounded annually. When he retires, he'll combine the savings into an account with an APR of 5% compounded yearly. How much will he be able to withdraw each year assuming he lives for 25 years after retirement. (Chapter 5) or receiving annual payments of $800,000 indefinitely. The APR is 6%. Which option should Sunny ch (Chapter 5) Question 2. Sunny today won a lottery of $15 million. He has the option of either taking the lump sum amount Question 3, Big Baller Brand has 8% coupon bonds outstanding making semi annual payments with ama of 7.2%. The current yield on these bonds is 7.55%. How many years do these bonds have left until they mature? (Chapter 6) Question 4. MoviePass, whose common stock is currently selling for $40 per share, just paid a $2.00 dividend this year. If investors believe that the expected rate of return on ABN is 14%, what growth rate in dividends must be expected? (Chapter 7) Question 5. Young Capital just paid a dividend of $3.15 per share. The company will ncrease its dividend by 20% next year and then reduce its growth rate by 5% until it reaches the industry average of 5% after which it would maintain the growth rate forever. If the required return on the stock is 12%, what will the stock sell for today? (Chapter 7) Question 6. After pulling an all-nighter in the Baruch library, you decided to invest in Finance 3000. There is a 20% chance, you will get a 16% return, a 30% chance of getting a 14% return, a 40% chance of getting a 12% return, and a 10% chance of getting an-8% return, what is the standard deviation of the stock returns? (Chapter 11) Question 7. Bearcat purchased a stock for $25 a share, held it the stock for $26.45. The inflation rate was 2.3%. What real rate of return did it earn? (Chapter 11) for one year, received a $1.34 dividend, and sold Question 8. Over the past 4 years B deviation of returns? (Chapter 11) aruch fund returned 18%,-996,-12%, and 15%, what is the standard