Question
Question 11 2 points Save How much would you be willing to pay for a 10-year ordinary annuity if the payments are $500 per year and the rate of return is 6.25% annually?
$3,423 $3,637 $3,864 $4,132 How much would you be willing to pay for a 10-year ordinary annuity if the payments are $500 per year and the rate of return is 6.25% annually? Cabell Corp. bonds pay an annual coupon rate of 10%. If investors' required rate of return is now 8% on these bonds, they will be priced at: Common stock does not mature. What is diversifying among different kinds of assets known as? You purchased 1,000 shares of Oliver Inc. common stock one year ago for $50 per share. You decided to take your profit today by selling at $55.00 per share. What is your holding period return? Assume that you have $165,000 invested in a stock whose beta is 1.25, $85,000 invested in a stock whose beta is 2.35, and $235,000 invested in a stock whose beta is 1.11. What is the beta of your portfolio? Cary's Company bonds have a 12% coupon rate. Interest is paid semi-annually. The bonds have a par value of $1,000 and will mature 8 years from now. Compute the value of the bonds if investors' required rate of return is 8%. Preferred stock has priority over common stock with respect to its claims on income for dividends. If a firm were to experience financial insolvency, the legal system provides an order of hierarchy for the payment of claims. Assume that a firm has the following outstanding securities: mortgage bonds, common stock, debentures, and preferred stock. Rank the order in which investors that own mortgage bonds would have their claim paid? Which of the following should investors consider when determining their required rate of return? The restrictive provisions contained in the bond indenture protect the common stockholders. Tangier Manufacturing's common stock has a beta of 1.8. If the expected risk free return is 5% and the expected return on the market is 16%, what is the expected return on Tangier's stock?
Explanation / Answer
(11) $3,637
(12)A premium to par value
(13)True
(14)Capital asset classification.
(15)10.0%
(16)1.37
(17)$894.06
(18)True
(19)First.
(20)All of the above.
(21) False
(22)
24.8%
