Complete the following problems inMicrosoft Excel. Your work must be completed in the attached template.

Instructions NAME: To complete the homework assignments in the templates provided: 1. The question is provided for each problem. You may need to refer to your textbook for additional information in a few cases. 2. You will enter the required information into the shaded cells. 3. The cells are coded: a) T requires a text answer. Essay questions require references; use the textbook. b) C requires a calculation, using Excel formulas or functions. You cannot perform the operation on a calculator and then type the answer in the cell. You will enter the calculation in the cell, and only the final answer will show in the cell. I will be able to review your calculation and correct, if necessary. c) F requires a number only. In some problems, a \"Step 1\" is added to help you solve the problem. d) Formula requires a written formula, not the numbers. For example, the rate of return = [(1 + nominal)/ (1+inflation)]-1, or D (debt) + E (equity) = V (value). 4. Name your assignment file as "lastnamefirstinitial-FINC600-Week#", and submit by midnight ET, Day 7. Problem 1-6 In most large corporations, ownership and management are separated. What are the main implications of this separation? Answer: Problem 1-8 We can imagine the financial manager doing several things on behalf of the firm's stockholders. For example, the manager might: a. Make shareholders as wealthy as possible by investing in real assets. b. Modify the firm's investment plan to help shareholders achieve a particular time pattern of consumption. c. Choose high- or low-risk assets to match shareholders' risk preferences. d. Help balance shareholders' checkbooks. But in well-functioning capital markets, shareholders will vote for only one of these goals. Which one? Why? Answer: WHY? Problem 2-9 A. The cost of an automobile is $10,000. If the interest rate is 5%, how much would you have to set aside now to provide this sum in five years? B. You have to pay $12,000 a year in school fees at the end of each of the next six years. If the interest rate is 8%, how much do you set aside today to cover these bills? C. You have invested $60,476 at 8%. After paying the above school fees, how much would you remain at the end of six years? Answers: Calculation A. PV C B. Annuity factor Set aside amount C C C. Remainder after 6 years C Annuity factor is the present value of $1 paid for each of t periods - p. 29 in text Problem 2-12 What is the PV of $100 received in: A. Year 10 (at a discount rate of 1%) B. Year 10 (at a discount rate of 13%) C. Year 15 (at a discount rate of 25%) D. Each of years 1 through 3 (at a discount rate of 12%)? Answers: Calculation $90.53 A. Year 10/1% B. Year 10/13% $29.46 C. Year 15/25% $3.52 D. Year 1 Year 2 Year 3 Total $89.29 $79.72 $71.18 $240.18 Problem 3-3 In February 2009 Treasury 6s of 2026 offered a semiannually compounded yield of 3.5965%. Recognizing that coupons are paid semiannually, calculate the bond's price. Answer: Enter the values in blue colored cells Settlement (start) Date Maturity Date Coupon Rate YTM Price C C F F C TIP: Use the Date function under Formulas to enter dates TIP: See p. 47 for determining coupon rate Use Excel's PRICE function to find the value of the bond Use 100 as standard redemption when one is not provided Problem 3-4 Here are the prices of three bonds with 10-year maturities: Bond Coupon (%) 2 4 8 Price (%) 81.62 98.39 133.42 If coupons are paid annually, which bond offered the highest yield to maturity? Which had the lowest? Which bonds had the longest and shortest durations? Answer: Use Excel's YIELD function to find the YTM and the DURATION function of the bond under each of the above assumptions: Coupon Rate Price (%) Settlement Date Maturity Date YTM Duration Highest yield to maturity Lowest yield to maturity Longest duration Shortest duration 2% F C C C C T T T T 4% F C C C C 8% F C C C C TIP: Use the Date function under Formulas to enter dates