Telex, Inc. needs to raise $20 million by issuing bonds. It plans to issue a $1000 par value bond that makes semiannual coupon payments and has 10 years to maturity. The bond has a coupon rate of 5.00%. The yield to maturity on the bond is expected to be 6.90%. How many bonds must be issued (rounded up to the nearest whole number)? 1) 23,623 2) None of the answers in this list is within 20 bonds of the correct answer. 3) 23,422 4) 23,139 5) 23,848 6) 24,015 Caspian Water needs to raise $59.00 million by issuing additional shares of stock. If the market estimates Caspian Water will pay a dividend of $2.12 next year (D1 = 2.12), which will grow at 3.99% forever and the cost of equity to be 12.82%, then how many shares of stock must the firm sell? 1) None of the answers in this list is within 100 shares of the correct answer. 2) 312,890 3) 2,975,934 4) 4,128,970 5) 915,939 6) 2,457,406 Chad is an engineer who hopes to have $1,000,000 in his retirement account by his 60th birthday, which is 421 months from today. Starting next month, he plans to deposit 20% of his monthly salary into an account that will pay interest of 5.00% p.a. How much does he need to make per month (i.e., what salary per month) to achieve his goal? Note that he makes 421 total deposits. 1) $4,378.95 2) $3,203.40 3) None of the answers in this list is within $0.20 of the correct answer. 4) $4,170.32 5) $2,919.30 6) $3,503.16 Suppose the risk-free rate (Rf) is 3.64% and an analyst assumes a market risk premium (Rm - Rf) of 7.50%. Firm A just paid a dividend of $1.05 per share (i.e., DO = 1.05). The analyst estimates the beta of Firm A to be 1.49 and estimates the dividend growth rate to be 4.13% forever. Firm A has 2.2 million shares outstanding. What is the market value of the equity of Firm A? 1) $26.236 million 2) $22.512 million 3) $24.770 million 4) $26.236 million 5) None of the answers in this list is within $0.010 million of the correct answer. 6) $22.236 million