Suppose the September CBOT Treasury bond futures contract (6% coupon rate, semiannual payment, and 20 years to maturity) has a quoted price of 96-09. If annual interest rates go up by 1.00 percentage point, what is the gain or loss on the futures contract? (Assume a $1,000 par value, and round to the nearest whole dollar.) a. -$106.00 b. -$105.00 c. -$104.00 d. -$101.00 e. -$103.00 Which of the following is generally NOT true and an advantage of going public? a. Facilitates stockholder diversification. b. Increases the liquidity of the firm's stock. c. Makes it easier to obtain new equity capital. d. Establishes a market value for the firm. e. Makes it easier for owner-managers to engage in profitable self-dealings. Brantley Buildings Inc. has decided to go public by selling $6,000,000 of new common stock. Its investment bankers agreed to take a smaller fee now (6% of gross proceeds versus their normal 10%) in exchange for a 1 year option to purchase an additional 200,000 shares at $5.00 per share. The investment bankers expect to exercise the option and purchase the 200,000 shares in exactly one year, when the stock price is forecasted to be $6.50 per share. However, there is a chance that the stock price will actually be $12.00 per share one year from now. If the $12 price occurs, what would the present value of the entire underwriting compensation be? Assume that the investment banker's required return on such arrangements is 15%, and ignore taxes. a. $1,507,391 b. $1,577,391 c. $1,569,391 d. $1,541,391 e. $1,517,391

Northern Water Company just sold a bond with 60 warrants attached. The bonds have a 20-year maturity and an annual coupon of 10%, and they were issued at their $1,000 par value. The current yield on similar straight bonds is 15%. What is the implied value of each warrant? a. $3.26 b. $3.68 c. $3.13 d. $3.35 e. $3.56 Which of the following statements is CORRECT? a. Increasing a company