Last year, Star Corp. reported annual revenue of $1.4 million, COGS of $9.8 million, and a weighted average cost of capital of 8%.  At year end, it had accounts receivable of $0.6 million and accounts payable of $0.7 million. Days inventory was 43.2 days. 

What was its days' payables?

 

Security A is a fully taxable security that earns 5% annually. Security B is a tax-exempt municipal security. If a short-term investment manager uses a tax rate of 33%.

What yield must security B earn such that the investment manager would be indifferent between securities A and B? 

 

 

An investor purchases a corporate bond which matures in four years. The bond pays interest of $500 in each of years one and two and then $550 in years three and four. 

Calculate the present value of this payment stream assuming a discount rate of 8%.

Answer rating: 100% (QA)

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