What is the coupon rate of a 9-year,$1,000bond with coupons paid annually and a price of $900,if it has a yield to maturity of 5.00%?

 

NOTE:Answer with two decimals after the dot.DO NOT USE the "%"sign

QUESTION 3

Suppose a eight-year,$100,000 face value bond with an 7% coupon rate and quarterly coupons is trading with a yield to maturity of 8.0%.Is this bond trading at

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Discount

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QUESTION 4

What is the coupon payment of a 28-year $1,000 bond with a 5.08%coupon rate APR with quarterly payments?

NOTE:Submit your answers with 4decimals after the dot.

QUESTION 5

Consider a zero-coupon bond with $1,000face value and 16to maturity.If the YTM is 4.28%,this bond will trade at a price of?

NOTE:Submit your answers with 4decimals after the dot

QUESTION 6

Suppose Corporation A has a book (face) debt value of $9M, trading at 85% of face value. It also has book equity of $24million, and 2.9 million shares of common stock trading at $27 per share. What is the weight for for common equity that Corporation A shoulduse in calculating its WACC?

NOTE: Answer in percentages. That is, if your answer is 90% or 0.90, you should answer 90.00, not 0.90

QUESTION 7

Suppose Corporation A has a book (face) debt value of $12M, trading at 77% of face value. It also has book equity of $20million, and 1.95 million shares of common stock trading at $27 per share. What is the weight for debt that Corporation A should use in calculating its WACC?

NOTE: Answer in percentages. That is, if your answer is 90% or 0.90, you should answer 90.00, not 0.90

QUESTION 8

JJ firm issues preferred dividends at an annual rate of $5.86. Its current preferred stock price is $20.76. Assume that the equity beta for JJ is 0.93. The Yield on 10-year treasuries is 3.84%, and that the market risk premium for the year is 8%.The company's EPS expectedgrowth is 3%. For this year, the dividends for JJ firm are the same for common and preferred stock; additionally the price for common stock is $31.What is the common cost of equity for JJ Firm using the CAPM method?

NOTE: Answer in percentages. That is, if your answer is 90% or 0.90, you should answer 90.00, not 0.90

QUESTION 9

JJ firm issues preferred dividends at an annual rate of $4.98. Its current preferred stock price is $20.9. Assume that the equity beta for JJ is 1.36. The Yield on 10-year treasuries is 2.79%, and that the market risk premium for the year is 8%.The company's EPS expectedgrowth is 4%. For this year, the dividends for JJ firm are the same for common and preferred stock; additionally the price for common stock is $33.What is the common cost of equity for JJ Firm using the CDGM method?

NOTE: Answer in percentages. That is, if your answer is 90% or 0.90, you should answer 90.00, not 0.90

QUESTION 10

JJ firm issues preferred dividends at an annual rate of $5.54. Its current preferred stock price is $26.37. Assume that the equity beta for JJ is 0.91. The Yield on 10-year treasuries is 3.36%, and that the market risk premium for the year is 5%.The company's EPS expectedgrowth is 4%. For this year, the dividends for JJ firm are the same for common and preferred stock; additionally the price for common stock is $32.What is the preferred cost of equity for JJ Firm?

NOTE: Answer in percentages. That is, if your answer is 90% or 0.90, you should answer 90.00, not 0.90

QUESTION 11

At 2018 ABI Construction has a face debt value of 28.9M trading at 87% with a pre-tax weigthed cost of 6.94%. ABI common equity for the year was valued at 89.74M and preferred equity for 14.04M. The Preferred equity rate was calculated to be 7.05%. However, the common equity was to be calculated using CAPM approach, with a 3% risk free rate and a 7% market risk premium rate, assuming a 1.34 Beta. If the tax rate is 42%, What is this firm's WACC?

NOTE: Answer in percentages. That is, if your answer is 90% or 0.90, you should answer 90.00, not 0.90

QUESTION 12

Suppose ABC firm is considering an investment that would extend the life of one of its facilities for 3 years. The project would require upfront costs of $6.05M plus $24.54M investment in equipment. The equipment will be obsolete in (N+2) years and will be depreciated via straight-line over that period (Assume that the equipment can't be sold). During the next 3 years, ABC expects annual sales of 79M per year from this facility. Material costs and operating expenses are expected to total 39M and 5.62M, respectively, per year. ABC expects no net working capital requirements for the project, and it pays a tax rate of 43%. ABC has 81% of Equity and the remaining is in Debt. If the Cost of Equity and Debt are 19.63% and 5.82% respectively, compute the NPV(Evaluate the project only for 3years)