2- How much would $1, growing at 3.5% per year, be worth after 75 years?
3- How much would $20,000 due in 50 years be worth today if the discount rate were 7.5%?
4- Suppose the U.S. Treasury offers to sell you a bond for $3,000. No payments will be made until the bond matures 10 years from now, at which time it will be redeemed for $5,000. What interest rate would you earn if you bought this bond at the offer price?
5- The Morrissey Company's bonds mature in 7 years, have a par value of $1,000, and make an annual coupon payment of $70. The market interest rate for the bonds is 8.5%. What is the bond's price?| | |
A 6- Projected free cash flows should be discounted at the firm's weighted average cost of capital to find the value of its operations.a.Trueb. Falsea 7- A stock just paid a dividend of D0 = $1.50. The required rate of return is rs = 10.1%, and the constant growth rate is g = 4.0%. What is the current stock price?a.$23.11b.$23.70c.$24.31d.$24.93e.$25.57e 8- Ratio analysis involves analyzing financial statements in order to appraise a firm's financial position and strength.| | |
9- Profitability ratios show the combined effects of liquidity, asset management, and debt management on operating results.| | |
A 10 - One problem with ratio analysis is that relationships can be manipulated. For example, if our current ratio is...