Suppose you have won a lottery that pays you immediately $1 million or $83,767 per year for the next 15 years with the first payment coming in exactly one year. Which option would you choose (assuming you are young and healthy and there are no taxes)? (I.e., determine the rate of return on accepting the annuity.)

Using the above data determine the following figures:

WACC

ROIC

EVA Spread

Assume that Leyda Inc. has an outstanding bond with a 6.5 % annual coupon, exactly 10 years to maturity, a par value of $1,000 and a yield of 5%. The bond is convertible into 100 shares of Leyda stock, which is currently priced at $10.25 per share. What is the approximate price of the Leyda bond?

Assume that Cullop Inc. has issued a bond with a 6.5 % annual coupon, 10 years to maturity, a par value of $1,000 and a yield of 5%. The bond is a deferred coupon bond and its first coupon payment will be made in exactly 4 years. What is the price of the Cullop bond?

Approximate the new bond price if interest rates rise by 1%.

What is the pre-tax cost of debt for PFE (the bond issuer)?

Cost of Capital Current Market Value Capital Structure (Millions of SAR Weig 3) Equity 4) Debt Cost (A-T) 5) Preferred Equity 82.5% 17.5% 0.0% os 13.1% 2.6% 0,0% Market Cap ST Debt LT Debt Pref. Eqty Total 393,660.0 82.5% 9,927.8 2.1% 73,781.6 15.5% 0.0 0.0% 477.369.4 100.0% WACC 6) History Economic Value Added (Millions of SAR WACCEVA ROIC EVA Spread 7) Net Operating Profit 8 Cash Operating Taxes 39352.10 -196. VAC 1125 NOPAT 303897.20 34311.59 Total Investment Capital. Capital Charge Economic Value Added ROIC 12905 0- 2005 200620200320922032014 EVA Spread urope 44 20 7330 7500 Germany 49 69 9204 1210 Hong Kong 852 2977 6000 ght 2014 Bloomberg Finance L.P 99-5462-0 26-Dec-2014 12 03 21 Japan 81 3 3201 8900 U.S. 1 212 318 2000 Japan ei 3 3201 8900 Singapore 65 6212 1000U.8. 1 32 41990PST GT3014 812cmber 20102032i SN 475790 PST GMT-8