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To enhance your understanding of financial concepts, please complete the following problems in your Corporate Finance textbook. Chapter 4, problem 2a, b, and c (pages
To enhance your understanding of financial concepts, please complete the following problems in your Corporate Finance textbook.
Chapter 4, problem 2a, b, and c (pages 117).
Chapter 4, problem 3 (page 118).
Chapter 4, problem 4 (page 118).
Chapter 4, problem 5 (page 119).
Chapter 4, problem 11 (page 122).
Chapter 5, problem 2a (page 158).
Chapter 5, problem 3 (page 158).
Chapter 6, problem 2 (page 190).
Chapter 6, problem 4 (page 190).
UNIT 2: TEXTBOOK PROBLEMS | |||||||
CHAPTER 4: PROBLEM 2 (a through c) | |||||||
A. | B. | C. | |||||
Present Value | 3,200 | 3,200 | 3,200 | ||||
Interest Rate | 6% | 8% | 6% | ||||
Number of Years | 10 | 10 | 20 | ||||
Future Value = | |||||||
CHAPTER 4: PROBLEM 3 | |||||||
A. | B. | C. | D. | ||||
Future Value = | 15,451 | 51,557 | 886,073 | 550,164 | |||
Interest Rate | 7% | 9% | 14% | 16% | |||
Number of Years | 12 | 8 | 19 | 24 | |||
Present Value = | |||||||
CHAPTER 4: PROBLEM 4 | |||||||
A. | B. | C. | D. | ||||
Present Value = | 217 | 432 | 41,000 | 54,382 | |||
Future Value | 307 | 896 | 162,181 | 483,500 | |||
Number of Years | 3 | 10 | 13 | 26 | |||
Interest Rate | |||||||
CHAPTER 4: PROBLEM 5 | |||||||
A. | B. | C. | D. | ||||
Present Value = | 625 | 810 | 18,400 | 21,500 | |||
Future Value | 1,284 | 4,341 | 402,662 | 173,439 | |||
Interest Rate | 9% | 11% | 7% | 10% | |||
Number of Years (or Periods) | |||||||
CHAPTER 4: PROBLEM 11 | |||||||
Discount Rate | 5% | 13% | 18% | ||||
Year 1: | $960 | $960 | $960 | ||||
Year 2: | $840 | $840 | $840 | ||||
Year 3: | $1,935 | $1,935 | $1,935 | ||||
Year 4: | $1,350 | $1,350 | $1,350 | ||||
Present Value @ 5%, 13%, and 18% = | (Note: Use the built-in NPV formula in Excel.) | ||||||
CHAPTER 5: PROBLEM 2 | |||||||
A. | |||||||
Settlement | (Think of Settlement as the beginning of the duration of the bond.) | ||||||
Maturity | (Think of Maturity as the end of the duration of the bond.) | ||||||
Rate | (Coupon Rate) | ||||||
YTM | (Yield to Maturity or Required Rate of Return) | ||||||
Redemption | (Bonds Face Value, Par Value, or Fair Price; Note that is $100, not $1,000. You make the adjustments by multiplying the answer by 10.) | ||||||
Frequency | (Coupon payments are semiannual, so you put in a 2. If they are annual, then you input a 1.) | ||||||
Basis | (Always leave it blank.) | ||||||
Bond Price | (The answer. But you need to multiply it by 10 to get the actual bond price.) | ||||||
Multiply by 10 | (Microsoft gives the bond price in 2 digits. You need to multiply it by 10 to get the actual bond price.) | ||||||
CHAPTER 5: PROBLEM 3 | |||||||
Settlement | (Think of Settlement as the beginning of the duration of the bond.) | ||||||
Maturity | (Think of Maturity as the end of the duration of the bond.) | ||||||
Rate | (Coupon Rate) | ||||||
Pr | (The bonds price per $100 face value) | ||||||
Redemption | (Bonds Face Value, Par Value, or Fair Price; Note that is $100, not $1,000.) | ||||||
Frequency | (Coupon payments are semiannual, so you put in a 2. If they are annual, then you input a 1.) | ||||||
Basis: | (Always leave it blank.) | ||||||
YTM | |||||||
CHAPTER 6: PROBLEM 2 | |||||||
Dividend Payment | $1.99 | ||||||
Dividend Growth Rate | 4.50% | ||||||
ZYX Stock Price | $31 | ||||||
Required Return = | |||||||
CHAPTER 6: PROBLEM 4 | |||||||
Dividend | $2.65 | ||||||
Dividend increase per year | 4.75% | ||||||
Required Return (Return on Investment) | 11% | ||||||
Stock Price = |
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