Please help with any questions you can!! 1. Microtalk issued bond about five yea

Question

Please help with any questions you can!! 1. Microtalk issued bond about five years ago. The bonds are callable nine years from today. The bonds are trading today for $1494.93. Assuming the bonds pay $100 in interest annually and that the company has to pay $1,100 when calling the bond, what is the bond's yield to call? (Points : 3) 6.23% 7.19% 4.21% 8% 2. I want to replace my old Toyota in five years. If I put $1,066 at the end of each year for the next five years into my savings account that pays 6% how much will I have accumulated at the end of the period? (Points : 3) $6,691.15 $5,637.10 $1,338.27 $6,009.14 7. Which of the following is is an EXCEPTION TO the many differences between long-term debt and preferred stock? (Points : 3) Long-term debt pays interest which is tax-deductible to the borrower. Preferred stockholders are paid before bondholders if the company bankrupts. Preferred stockholders are considered non-voting (generally) owners of the company. The firm is not legally required to pay preferred stock dividends, but must pay interest to bondholders. 9. To decrease the additional financing needed to support an increase in sales, management can (Points : 3) decrease notes payable retire common stock increase the dividend payout cut dividends 10. My Cousin Cora has promised to give me $15,000 nine years from now to help pay for my son's college education. She also promised to pay me $16,000 a year after the first payment, $17,000 in year 11 and $12,000 in year 12. These four payments are spaced to be given to me exactly nine, ten, eleven and twelve years from today. Assuming a discount rate of 8% what would be the value of these payments to me today? (Points : 3) $26,971.20 $42,340 $19,775.89 Exactly $14,000.00 11. Concamera Optiplex is going through a period where their expansion plans result in a skewed growth for the next three years. They plan to pay a dividend of $0.50 per share in the next year and the year after that (d1 and d2). Following that they expect to pay $0.525 in dividend in year 3 (a growth rate of 5% over year 2). After year 3 (from year 4) they expect a constant growth rate of 10%. What would be the value of the company's stock today if the required rate of return for the equity investor is 15%? (Points : 3) $8.75 $11.55 $75.00 $16.35 12. Which of the following financial intermediaries concentrates on collecting the contributions of employees and employers and invest them in a variety of financial assets? (Points : 3) Commercial banks finance companies thrift institutions none of the above 13. Jack borrowed $500 from me two years ago and is offering me $582.44 in return today. How much is the rate of interest he is paying me? (Points : 3) 9.07% 9.54% 7.93% 8.63% 5% 14. Tech Masters expects its dividend to be $0.48 next year. Dividends and earnings have been growing at a compound annual rate of 8 percent and are expected to continue growing at that rate. What is an investor's required rate of return on Tech Masters if the current price is $12? (Points : 3) 12.3% 12.0% 10.0% 10.3 15. What is the rate of return on a preferred stock of Raina Inc. You are given the following information: that the preferred stock has a par value of $50, a market price of $46.50, and pays a dividend of $4.10? (Points : 3) 8.20% 11.34% 8.82% 12.20% 16. Fine Art Inc's sales for 2008 were $26 million and its total assets were $10 million. Current liabilities were $4 million and total equity was $2 million. The Company's sales for 2009 are forecasted to be $34 million, earnings after taxes are expected to be 5 percent of sales and dividends of $800,000 are expected to be paid. Assuming that the ratios "assets to sales" and "current liabilities to sales" in 2008 remain the same in 2009, determine the amount of additional financing required. (Points : 3) $1,746,154 $1,446,154 $6,946,154 $ 946,154 17. Agency problems give raise to Agency costs, which are essentially costs borne by shareholders to minimize those problems. (Points : 3) True False 18. I bought 100 shares of Oil Slick stock nine months ago for $46 per share, received two $50 dividend checks, and sold the stock today at $39 a share. What is my Holding Period Return? (Points : 3) 5.56% 8.33% 11.11% 6.94% none of the above 19. Generally, a young family is likely to be a surplus spending unit and an older family might be classified as a deficit spending unit. (Points : 3) True False 20. What is the present value of the following net cash flows if the discount rate is 9%: Year Cash Flow 1-5 $10,000 each year 6-10 $15,000 each year 11-15 $17,000 each year (Points : 3) $151,400 $ 86,462 $144,037 $ 79,252 $104,748 21. Which of the following is not a right of common stockholders? (Points : 3) Dividend Rights Asset Rights Preemptive Rights Cumulative dividend rights Voting Rights 22. Microblast bonds currently sell for $1,250. The bonds pay an annual interest of of 11% on a face value of $1,000. The bonds have 20 years left to maturity. The company and the bondholders expect these bonds to be called 5 years from now at a value of $1,110. What is the yield to call on this bond? (Points : 3) 6.85% 8.38% 7.96% 5.908% 23. Tiger Indirect expects to pay a dividend of $0.50 next year. They also expect that the dividends will grow at 15% for year 2. After year two, they expect the dividends to get back to the normal 7% growth rate. Assuming a 10% required rate of return, what would you pay for this company's stock today? (Points : 3) $17.87 approximately 12.53 dollars $19.41 $34.09 24. The Primary reason for the divergence between shareholder wealth maximization goal and the actual goals pursued by managment has been attributed to: (Points : 3) separation of social responsibility and stakeholders' concerns separation of ownership and control separation of personal welfare and long-run profit goals the granting of 'golden parachute" contracts 25. If you invest the $10,000 you receive at graduation (age 22) in a mutual fund that averages a 12% annual return, how much will you have at retirement in 40 years? (Points : 3) $909,090 $930,510 $783,879 $510,285 26. Your brother, who is 6 years old, just received a trust fund that will be worth $25,000 when he is 21 years old. If the fund earns 10 percent interest compounded annually, what is the value of the fund today? (Points : 3) $104,602 $6,575 $5,910 $6,875 $5,985 27. There are consequences associated with not paying interest to bondholders. Which of the following apply? I. Not paying an interest payment automatically puts the company in default. II. Interest on debt is not required to be paid, but the corporation generally does so for public relations reasons. (Points : 3) I only II only Both I and II Neither I nor II Actually a company can default with special permission from SEC, so only II can be right. 28. Napier, Inc., has a total asset turnover of 8 times and a return on total assets of 16.4%, its net profit margin must be (Points : 3) 1.875% 1.95% 2.05% 2.25% 12.32% 29. John M. Exact is 35 years old and wishes to retire in 30 years. His plan is to invest in a mutual fund earning a 12 percent annual return and have a $1 million retirement fund at age 65. How much must he invest at the end of each year to achieve this goal? (Points : 3) $7,499.96 $5,024.60 $4,143.65 $33,333.33 $4,008.98 30. My uncle Nathan H., the Great offered to reward me for my work in the community. He gave me $100 today and promised to give me two more such payments of $100 each coming exactly one year from today and two years from today. Assuming an interest rate of 5%, what would be the present value of this stream of payments to me? (Points : 3) $272.32 $285.94 $300 $20 31. Assuming that a company pays $50 interest each 6 months on its bonds (semi-annual), what would be the present value of these bonds (market value) if the required rate of return in the market is 5% per annum and the bonds have 15 years left to maturity. Assume a face value (maturity value) of $1,000. (Points : 3) Below $1,000 between $1,000-$1,200 $1,523.26 $827.56 32. An EAL bond has a coupon rate of 16 percent, pays interest semiannually, and matures in 15 years. If the bond is selling for $968.82, what is its yield to maturity? (Points : 3) 8.3% 15.1% 16.6% 14.3% 33. Assume that the following relationships for B. Huang: Total Asset Turnover Ratio =2 ROA =3% ROE =5% What is the debt to assets ratio assuming that the firm uses only debt and common equity and all liabilities are long term debt? (Points : 4) 10% 20% 30% 40% 50%

Explanation / Answer

ANSWERS

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.