Deposit Investment Assignment | Homework For You
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20) If you earn an annual interest rate of 8.9 percent, how many years will it take to double your money?
A) 7.11 years B) 8.13 years C) 6.50 years D) 7.39 years E) 7.50 years
21) Your bank will pay you an interest rate of .082 percent compounded weekly. You want to have $20,500 in 7 years. How much will you have to deposit today? Assume 52 weeks per year.
22) Myca Corp. has a project with the following cash flows. What is the value of the cash flows today assuming an annual interest rate of 10 percent? Year Cash Flow 1 $ 1,820 2 2,300 Version 1 9 3 2,640 4 2,650
A) $6,532.29 B) $9,410.00 C) $8,379.41 D) $8,083.71 E) $7,348.83
23) Your parents are giving you $220 a month for 4 years while you are in college. At an interest rate of .51 percent per month, what are these payments worth to you when you first start college?
A) $9,345.76 B) $8,878.47 C) $9,034.23 D) $9,173.42 E) $11,930.53
24) A friend wants to borrow money from you. He states that he will pay you $2,800 every 6 months for 10 years with the first payment exactly 6 years and six months from today. The interest rate is an APR of 5.1 percent with semiannual compounding. What is the value of the payments today?
A) $33,185.19 B) $31,316.14 C) $32,114.70 D) $32,234.10 E) $30,130.91 Version 1 10
25) Your grandparents put $10,000 into an account so that you would have spending money in college. You put the money into an account that will earn an APR of 4.15 percent compounded monthly. If you expect that you will be in college for 4 years, how much can you withdraw each month?
A) $230.39 B) $237.79 C) $218.91 D) $226.46 E) $225.68
26) Your grandparents would like to establish a trust fund that will pay you and your heirs $140,000 per year forever with the first payment 13 years from today. If the trust fund earns an annual return of 2.7 percent, how much must your grandparents deposit today?
A) $3,570,903.07 B) $4,786,324.79 C) $5,185,185.19 D) $4,320,987.65 E) $3,766,335.02
27) Whatever, Inc., has a bond outstanding with a coupon rate of 5.64 percent and semiannual payments. The yield to maturity is 6.1 percent and the bond matures in 15 years. What is the market price if the bond has a par value of $1,000?
A) $974.31 B) $955.61 C) $955.21 D) $957.94 E) $956.68
28) Kasey Corp. has a bond outstanding with a coupon rate of 5.5 percent and semiannual payments. The bond has a yield to maturity of 5.1 percent, a par value of $2,000, and matures in 20 years. What is the quoted price of the bond? Version 1 11
29) Broke Benjamin Co. has a bond outstanding that makes semiannual payments with a coupon rate of 5.9 percent. The bond sells for $968.49 and matures in 23 years. The par value is $1,000. What is the YTM of the bond?
A) 6.16% B) 3.08% C) 4.62% D) 5.85% E) 5.54%
30) A bond has a par value of $1,000, a current yield of 8.21 percent, and semiannual coupon payments. The bond is quoted at 103.57. What is the coupon rate of the bond?
A) 8.21% B) 8.50% C) 17.01% D) 9.57% E) 16.42%
31) Navarro, Inc., plans to issue new zero coupon bonds with a par value of $1,000 to fund a new project. The bonds will have a YTM of 6.09 percent and mature in 15 years. If we assume semiannual compounding, at what price will the bonds sell?
A) $411.99 B) $390.36 C) $393.07 D) $396.46 E) $406.62
32) You are considering purchasing stock in Canyon Echo. You feel the company will increase its dividend at 4.4 percent indefinitely. The company just paid a dividend of $3.29 and you feel that the required return on the stock is 10.6 percent. What is the price per share of the company’s stock?
A) $31.04 B) $55.40 C) $49.86 D) $52.63 E) $53.06
33) A stock currently sells for $54. The dividend yield is 3.2 percent and the dividend growth rate is 4.5 percent. What is the amount of the dividend that was just paid?
A) $1.45 B) $1.73 C) $1.57 D) $1.65 E) $1.56
34) A stock is expected to maintain a constant dividend growth rate of 4.2 percent indefinitely. If the stock has a dividend yield of 5.5 percent, what is the required return on the stock? Version 1 13
35) Asonia Co. will pay a dividend of $4.60, $8.70, $11.55, and $13.30 per share for each of the next four years, respectively. The company will then close its doors. If investors require a return of 10.8 percent on the company's stock, what is the stock price?
A) $33.40 B) $31.01 C) $35.20 D) $28.55 E) $41.00
36) The Bell Weather Co. is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 21 percent a year for the next 4 years and then decreasing the growth rate to 5 percent per year. The company just paid its annual dividend in the amount of $2.80 per share. What is the current value of one share of this stock if the required rate of return is 8.30 percent?
A) $193.77 B) $138.82 C) $190.97 D) $153.71 E) $156.51
37) Guerilla Radio Broadcasting has a project available with the following cash flows: Year Cash Flow 0 −$12,800 Version 1 14 1 5,300 2 6,600 3 6,000 4 4,400 What is the payback period?
A) 2.51 years B) 2.15 years C) 2.39 years D) 3.00 years E) 1.85 years
38) A project with an initial cost of $51,400 is expected to generate annual cash flows of $17,350 for the next 5 years. What is the project’s internal rate of return?
A) 20.43% B) 19.41% C) 18.39% D) 22.70% E) 22.13%
39) Yellow Day has a project with the following cash flows: Year Cash Flows 0 −$27,100 1 10,600 2 20,700 Version 1 15 3 9,780 4 −3,650 What is the MIRR for this project using the reinvestment approach? The interest rate is 8 percent
A) 18.06% B) 20.02% C) 15.48% D) 10.95% E) 13.14%. Get Finance homework help today