You own a portfolio that has $2,200 invested in Stock A and $3,950 invested in Stock B. If the expected returns on these stocks are 8 percent and 16 percent, respectively, what is the expected return on the portfolio?(Do not round your intermediate calculations.)

You bought one of Great White Shark Repellant Co.s 11 percent coupon bonds one year ago for $780. These bonds make annual payments and mature 8 years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 15 percent. If the inflation rate was 3.8 percent over the past year, what was your total real return on investment?

Suppose you bought a 8 percent coupon bond one year ago for $1,100. The bond sells for $1,180 today.

Requirement 1:

Assuming a $1,000 face value, what was your total dollar return on this investment over the past year?

(Click to select)$130$160$174$80$163

Requirement 2:

What was your total nominal rate of return on this investment over the past year?

(Click to select)7.27%11.78%15.85%14.55%17.31%

Requirement 3:

If the inflation rate last year was 4 percent, what was your total real rate of return on this investment?(Do not round intermediate calculations.)

Suppose a stock had an initial price of $67 per share, paid a dividend of $1.55 per share during the year, and had an ending share price of $84. Compute the percentage total return.

Summer Tyme, Inc., is considering a new 4-year expansion project that requires an initial fixed asset investment of $1.728 million. The fixed asset will be depreciated straight-line to zero over its 4-year tax life, after which time it will be worthless. The project is estimated to generate $1,536,000 in annual sales, with costs of $614,400.

Required:

If the tax rate is 30 percent, what is the OCF for this project?

Consider an asset that costs $211,200 and is depreciated straight-line to zero over its 12-year tax life. The asset is to be used in a 5-year project; at the end of the project, the asset can be sold for $26,400.

Required :

If the relevant tax rate is 33 percent, what is the aftertax cash flow from the sale of this asset?(Do not round your intermediate calculations.)

Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land 12 years ago for $6 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent these facilities from a competitor instead. If the land were sold today, the company would net $10 million. The company wants to build its new manufacturing plant on this land; the plant will cost $13.2 million to build, and the site requires $900,000 worth of grading before it is suitable for construction.

Required :

What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project?

Consider the following income statement:

Sales	$ 930,648
Costs	605,472
Depreciation	137,700
Taxes	33 %

Required:
(a )	Calculate the EBIT.
	(Click to select)196,850193,100178,102181,852187,476

(b )	Calculate the net income.
	(Click to select)119,329131,889121,841125,609129,377

(c )	Calculate the OCF.
	(Click to select)263,309276,474125,609387,043250,144

(d )	What is the depreciation tax shield?

You have $20,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 15 percent and Stock Y with an expected return of 6 percent.

Required:

(a)	If your goal is to create a portfolio with an expected return of 12.2 percent, how much money will you invest in Stock X?
	(Click to select)$14,467$14,329$27,111$13,778$13,089

(b)	If your goal is to create a portfolio with an expected return of 12.2 percent, how much money will you invest in Stock Y?
	(Click to select)$5,911$5,973$6,533$6,222$6,471

The Down and Out Co. just issued a dividend of $2.61 per share on its common stock. The company is expected to maintain a constant 5 percent growth rate in its dividends indefinitely. If the stock sells for $60 a share, what is the company's cost of equity?(Do not round your intermediate calculations.)

Waller, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 10 years to maturity that is quoted at 102 percent of face value. The issue makes semiannual payments and has an embedded cost of 11 percent annually.

Required:

(a)	What is the company's pretax cost of debt?(Do not round your intermediate calculations.)
	(Click to select)11.20%10.67%11.10%11.20%10.14%

(b)	If the tax rate is 36 percent, what is the aftertax cost of debt?(Do not round your intermediate calculations.)
	(Click to select)6.83%5.79%7.17%7.10%6.49%