" What is the present vatwe ot as prements of 5100 each received every 24 months at an averat discount rate of 9 5951.28 b51209.10 $620.43 Answer: 5. Which of the following is the least appropriate method for an external analyst to w to estimate company's target capital structure for determining the weighted average cost of capital (WACC? #. Using averages of comparable companies' capital structure b. Using the company's current capital structure at book value weights c. Using statements made by the company's management regarding capital structure policy Answer 6. A financial contract offers to pay 61,200 per month for five years with the first payment made immediately. Assuming an annual discount rate of 6.5%, compounded monthly the present value of the contract is closest to: a 61 330 b. C63,731. 61,663 Answer 7. The market value of an 18-year zero-coupon bond with a maturity value of $1,000 discounted at a 12% annual interest rate with semi-annual compounding is closest to a $192.86 b $130.04 c. $122.74 Answer 8. In the big picture of corporate finance, the first big piece is the investment decision. Which of the following best characterizes that decision? Firms should take investments that a. make them more profitable b. generate the most cash flows c eam the highest returns d. earn returns greater than the risk free rate e. earn returns greater than the risk adjusted hurdle rate