QUESTION 1 Franklin Corp. just issued a 10 year bond with semi-annual coupons. The annual coupon...

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QUESTION 1 Franklin Corp. just issued a 10 year bond with semi-annual coupons. The annual coupon rate is 8% and the current yield to maturity for the bond is 8.2%. The face value of the bond is $1,000. What is the bond's current price? $986.53 $1,525.36 $980.65 $1000 QUESTION 2 Willa enjoys calculating stock prices in her spare time. She sees Labelle Enterprises with an annual dividend of $2.30 just paid last month, a cost of equity of 8% and a growth rate of earnings currently at 7%. What is the theoretical stock price of Labelle? $23.00 $28.75 $230.00 $246.10 QUESTION 3 I What is the PVO of the terminal value where the dividend of $3.22 is the first dividend of the perpetuity, the cost of equity is 6%, and the dividends are expected to grow at 2% in the sixth year and forever thereafter? $80.50 $60.15 $53.67 $161.00 QUESTION 4 The stock of Patsy Corp. is worth $50 on the market today. They paid their annual dividend of $5.00 last month. Their earnings growth rate is 4%. What is Patsy's current dividend yield? 10% QUESTION 5 Kaiser Construction has a stock price of $40 and a growth rate of 5%. If Kaiser has a cost of equity of 7%, what is their next dividend expected to be? O 7% O$0.80 $2.00 $0.08 QUESTION 6 Takeshi Tanaka owns a Japanese bond with a face value of 1,000,000 Japanese yen. The market price of the bond in Tokyo is 800,000. The yield is 4% and the annual-pay coupon is 7%. How much time is left on the bond? O About 12 years O About 6 years O 1 year 10 years. QUESTION 7 A bond is issued at a coupon of 8% and an initial yield to maturity of 8%. 5 years later, yields for similar bonds are 10%. The price of the original 8% bond has dropped to around $900. Why has the price dropped? O Because new bonds will yield a 10% investment return, versus only 8% for the original one, so the market sells the old bonds to buy the more attractive 10% bonds. Because the rate used to discount the bond's coupons is now 10%, so the resulting present value of the discounted coupons is lower than it previously was. The bond market now sees the bond as riskier than it was before, and so will not pay as much for it as they used to. All of the above. QUESTION 8 A firm launches a product and commits net working capital of $500,000 to the new project. They estimated accounts receivable at a level of about $700,000 and no investment in inventory. What is their corresponding estimate for accounts payable? all answers 122 A QUESTION 9 The next five questions are all related to the following information: Halima Corp. has just paid a dividend of $3.20. Their current growth rate is 13%. This will last for three years, after which growth will level off to 4% for the very long term. The firm's cost of capital is 7%. What will their next dividend be? $3.20 $3.616 $3.424 $6.20 QUESTION 10 What is the present value of all the dividends paid during the high-growth period? $9.600 $15.519 $10.717 $12.319 QUESTION 11 What will the terminal value of the stock be at the end of the low growth period? $160.067 $130.662 $10.717 $68.589 QUESTION 1 Franklin Corp. just issued a 10 year bond with semi-annual coupons. The annual coupon rate is 8% and the current yield to maturity for the bond is 8.2%. The face value of the bond is $1,000. What is the bond's current price? $986.53 $1,525.36 $980.65 $1000 QUESTION 2 Willa enjoys calculating stock prices in her spare time. She sees Labelle Enterprises with an annual dividend of $2.30 just paid last month, a cost of equity of 8% and a growth rate of earnings currently at 7%. What is the theoretical stock price of Labelle? $23.00 $28.75 $230.00 $246.10 QUESTION 3 I What is the PVO of the terminal value where the dividend of $3.22 is the first dividend of the perpetuity, the cost of equity is 6%, and the dividends are expected to grow at 2% in the sixth year and forever thereafter? $80.50 $60.15 $53.67 $161.00 QUESTION 4 The stock of Patsy Corp. is worth $50 on the market today. They paid their annual dividend of $5.00 last month. Their earnings growth rate is 4%. What is Patsy's current dividend yield? 10% QUESTION 5 Kaiser Construction has a stock price of $40 and a growth rate of 5%. If Kaiser has a cost of equity of 7%, what is their next dividend expected to be? O 7% O$0.80 $2.00 $0.08 QUESTION 6 Takeshi Tanaka owns a Japanese bond with a face value of 1,000,000 Japanese yen. The market price of the bond in Tokyo is 800,000. The yield is 4% and the annual-pay coupon is 7%. How much time is left on the bond? O About 12 years O About 6 years O 1 year 10 years. QUESTION 7 A bond is issued at a coupon of 8% and an initial yield to maturity of 8%. 5 years later, yields for similar bonds are 10%. The price of the original 8% bond has dropped to around $900. Why has the price dropped? O Because new bonds will yield a 10% investment return, versus only 8% for the original one, so the market sells the old bonds to buy the more attractive 10% bonds. Because the rate used to discount the bond's coupons is now 10%, so the resulting present value of the discounted coupons is lower than it previously was. The bond market now sees the bond as riskier than it was before, and so will not pay as much for it as they used to. All of the above. QUESTION 8 A firm launches a product and commits net working capital of $500,000 to the new project. They estimated accounts receivable at a level of about $700,000 and no investment in inventory. What is their corresponding estimate for accounts payable? all answers 122 A QUESTION 9 The next five questions are all related to the following information: Halima Corp. has just paid a dividend of $3.20. Their current growth rate is 13%. This will last for three years, after which growth will level off to 4% for the very long term. The firm's cost of capital is 7%. What will their next dividend be? $3.20 $3.616 $3.424 $6.20 QUESTION 10 What is the present value of all the dividends paid during the high-growth period? $9.600 $15.519 $10.717 $12.319 QUESTION 11 What will the terminal value of the stock be at the end of the low growth period? $160.067 $130.662 $10.717 $68.589

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The detailed answer for the above question is provided below 1 Given Annual coupon rate is 8 of face value 008 1000 80 Coupon is paid semiannually Cur... View the full answer