Chapter 5 Problem 1

1.) You are considering a car loan with a stated APR of 6% based on monthly compounding.What is the effective annual rate of this loan?

Chapter 6 problems 3 & 10

3.) Your company wants to raise $10 million by issuing 20-year-zero-coupon bonds.If the yield to maturity on the bonds will be 6% (annually compounded APR), what total principal amount of bonds must you issue?

10.) The yield to maturity of a $1,000 bond with 7% coupon rate, semiannual coupons, and two years to maturity is 7.6% APR, compounded semiannually.What must its price be?

Chapter 7 problem 13

13,) Summit Systems will pay a dividend of $1.50 this year.If you expect Summit's dividend to grow 6% per year, what is its price per share if the firm's equity cost of capital is 11%?

Chapter 11 problem 11

7.) The following table contains prices and dividends for a stock.All prices are after the dividend has been paid.If you bought the stock on January 1 and sold it on December 31, what is your realized return?

PRICEDIVIDEND

JAN10.00

MAR 3111.00.20

JUN 3010.50.20

SEP 3011.10.20

DEC 3111.00.20

Adv Financial Mgmt; FIN 405 Week 2 Homework: Chapter 5 Problem 1 1.) You are considering a car loan with a stated APR of 6% based on monthly compounding. What is the effective annual rate of this loan? Chapter 6 problems 3 & 10 3.) Your company wants to raise $10 million by issuing 20-year-zero-coupon bonds. If the yield to maturity on the bonds will be 6% (annually compounded APR), what total principal amount of bonds must you issue? 10.) The yield to maturity of a $1,000 bond with 7% coupon rate, semiannual coupons, and two years to maturity is 7.6% APR, compounded semiannually. What must its price be? Chapter 7 problem 13 13,) Summit Systems will pay a dividend of $1.50 this year. If you expect Summit's dividend to grow 6% per year, what is its price per share if the firm's equity cost of capital is 11%? Chapter 11 problem 11 7.) The following table contains prices and dividends for a stock. All prices are after the dividend has been paid. If you bought the stock on January 1 and sold it on December 31, what is your realized return? JAN MAR 31 JUN 30 SEP 30 DEC 31 PRICE 10.00 11.00 10.50 11.10 11.00 DIVIDEND .20 .20 .20 .20