Shady rack inc. | Business & Finance homework help

Question 1

 

How much did you borrow for your house if your monthly mortgage payment for a 30 year mortgage at 6.65% APR is $1,700?

[removed]

A.

$249,235

[removed]

B.

$218,080

[removed]

C.

$264,812

[removed]

D.

$202,503

[removed]

E.

$233,658

[removed]

F.

$186,926

6 points  

Question 2

 

Shady Rack Inc. has a bond outstanding with 10 percent coupon, paid semiannually, and 15 years to maturity. The market price of the bond is $1,039.55. Calculate the bond’s yield to maturity (YTM). Now, if due to changes in market conditions, the market required YTM suddenly increases by 2% from your calculated YTM, what will be the percent change in the market price of the bond?

[removed]

A.

-17.76%

[removed]

B.

-15.66%

[removed]

C.

-14.01%

[removed]

D.

-14.87%

[removed]

E.

-16.39%

[removed]

F.

-17.09%

6 points  

Question 3

 

Sanaponic, Inc. will pay a dividend of $6 for each of the next 3 years, $8 for each of the years 4-7, and $10 for the years 8-10.  Thereafter, starting in year 11, the company will pay a constant dividend of $8/year forever.  If you require 18 percent rate of return on investments in this risk class, how much is this stock worth to you?

[removed]

A.

$37.77

[removed]

B.

$55.99

[removed]

C.

$45.68

[removed]

D.

$50.50

[removed]

E.

$41.46

[removed]

F.

$34.54

6 points  

Question 4

 

Your required rate of return is 12%. What is the net present value of a project with the following cash flows?
 

Year

0

1

2

3

4

5

Cash Flow

-750

450

350

150

125

-100

[removed]

A.

15.56

 

[removed]

B.

48.68

 

[removed]

C.

26.33

 

[removed]

D.

60.27

 

[removed]

E.

72.15

 

[removed]

F.

37.37

 

                   

6 points  

Question 5

 

Please use the following information for this and the following two questions.

BB Lean has identified two mutually exclusive projects with the following cash flows.
 

Year

0

1

2

3

4

5

Cash Flow Project A

-52,000.00

18,000.00

17,000.00

15,000.00

12,000.00

9,000.00

Cash Flow Project B

-52,000.00

17,800.00

10,000.00

12,000.00

17,000.00

22,000.00

 

The company requires a 11.5% rate of return from projects of this risk.
 
What is the NPV of project A?

[removed]

A.

972.57

[removed]

B.

5,972.87

[removed]

C.

417.37

[removed]

D.

1,395.64

[removed]

E.

1,624.90

[removed]

F.

5,180.35

6 points  

Question 6

 

What is the IRR of project B?

[removed]

A.

12.06%

[removed]

B.

14.68%

[removed]

C.

13.90%

[removed]

D.

13.05%

[removed]

E.

12.94%

[removed]

F.

20.80%

6 points  

Question 7

 

At what discount rate would you be indifferent between these two projects?

[removed]

A.

13.5250%

[removed]

B.

14.7386%

[removed]

C.

34.1306%

[removed]

D.

15.8950%

[removed]

E.

3.1177%

[removed]

F.

26.0812%

6 points  

Question 8

 

A bond with a face value of $1,000 has annual coupon payments of $100. It was issued 10 years ago and has 7 years remaining to maturity. The current market price for the bond is $1,000. Which of the following is true: I. Its YTM is 10%. II. Bond’s coupon rate is 10%. III. The bond’s current yield is 10%.

[removed]

A.

III  Only

[removed]

B.

I, II, and III

[removed]

C.

I, III  Only

[removed]

D.

II, III  Only

[removed]

E.

I  Only

[removed]

F.

I, II  Only

6 points  

Question 9

 

Riverhawk Corporation has a bond outstanding with a market price of $1,050.00.  The bond has 10 years to maturity, pays interest semiannually, and has a yield to maturity of 9%.  What is the bond’s coupon rate?

[removed]

A.

12.84%

[removed]

B.

9.77%

[removed]

C.

10.54%

[removed]

D.

12.08%

[removed]

E.

11.31%

[removed]

F.

13.61%

6 points  

Question 10

 

You purchased a stock for $24 per share. The most recent dividend was $2.50 and dividends are expected to grow at a rate of 8% indefinitely. What is your required rate of return on the stock?

[removed]

A.

17.00%

[removed]

B.

17.64%

[removed]

C.

18.38%

[removed]

D.

21.50%

[removed]

E.

20.27%

[removed]

F.

19.25%

6 points  

Question 11

 

Sales and profits of Growth Inc. are expected to grow at a rate of 25% per year for the next six years but the company will pay no dividends and reinvest all earnings. After that, the dividends will grow at a constant annual rate of 7%. At the end of year 7, the company plans to pay its first dividend of $4.00 per share. If the required return is 16%, how much is the stock worth today?

[removed]

A.

$22.80

[removed]

B.

$15.96

[removed]

C.

$13.68

[removed]

D.

$25.08

[removed]

E.

$18.24

[removed]

F.

$20.52

6 points  

Question 12

 

Apple Sink Inc. (ASI) just paid a dividend of $2.50 per share.  Its dividends are expected to grow at 26% a year for the next two years, 24% a year for the years 3 and 4, 16% for year 5, and at a constant rate of 6% per year thereafter.  What is the current market value of the ASI’s stock if companies in this risk class have a 16% required rate of return?

[removed]

A.

$54.27

[removed]

B.

$56.03

[removed]

C.

$45.54

[removed]

D.

$42.87

[removed]

E.

$51.29

[removed]

F.

$48.35

6 points  

Question 13

 

The Retarded Company’s dividends are declining at an annual rate of 4 percent.  The company just paid a dividend of $4 per share.  You require a 16 percent rate of return.  How much will you pay for this stock?

[removed]

A.

$13.85

[removed]

B.

$19.20

[removed]

C.

$15.33

[removed]

D.

$17.09

[removed]

E.

$21.78

[removed]

F.

$12.57

6 points  

Question 14

 

The dividend yield of a stock is 10 percent. If the market price of the stock is $18 per share and its dividends have been growing at a constant rate of 6%, what was the most recent dividend paid by the company?

[removed]

A.

$1.53

[removed]

B.

$0.85

[removed]

C.

$1.70

[removed]

D.

$1.02

[removed]

E.

$1.19

[removed]

F.

$1.36

6 points  

Question 15

 

Last year, Jen and Berry Inc. had sales of $40,000, cost of goods sold (COGS) of 12,000, depreciation charge of $3,000 and selling, general and administrative (SG&A) cost of $10,000. The interest costs were $2,500. Thirty-five percent of SG&A costs are fixed costs. If its sales are expected to be $60,000 this year, what will be the estimated SG&A costs this year?

[removed]

A.

$12,667

[removed]

B.

$11,500

[removed]

C.

$10,636

[removed]

D.

$12,000

[removed]

E.

$13,250

[removed]

F.

$14,250

6 points  

Question 16

 

You require a risk premium of 3.5 percent on an investment in a company. The pure rate of interest in the market is 2.5 percent and the inflation premium is 3 percent.  US Treasury bills are risk free. What should be the yield of the US Treasury bills? Use multiplicative form.

[removed]

A.

6.35%

[removed]

B.

6.09%

[removed]

C.

5.58%

[removed]

D.

5.06%

[removed]

E.

5.32%

[removed]

F.

5.83%

6 points  

Question 17

 

Bonds X and Y are identical, including the risk class. The only difference between A and B is in the coupon payment as shown below.
 

 

Bond X

Bond Y

Face value

$1,000

$1,000

Annual Coupon Payment

$120

$130

Payment Frequency

Semiannual

Annual

Years to maturity

15

15

Price

$950.39

?

 
                What is the price of bond Y?

[removed]

A.

$1,007.15

[removed]

B.

$925.88

[removed]

C.

$989.75

[removed]

D.

$956.95

[removed]

E.

$940.92

[removed]

F.

$973.44

 

 

Calculate your paper price
Pages (550 words)
Approximate price: -

Why Work with Us

Top Quality and Well-Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

Professional and Experienced Academic Writers

We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.

Free Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.

Prompt Delivery and 100% Money-Back-Guarantee

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.

24/7 Customer Support

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

Calculate the price of your order

Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.

Essays

Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.

Admissions

Admission Essays & Business Writing Help

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.

Reviews

Editing Support

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.

Reviews

Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.