Find the coupon rate of a 8-year corporate bond that trades at $1,145 with a yield to maturity of 4.28%."

Q: Consider the table given below to answer the following question. The long-run growth rate is…

A: Present value = (cash flow)/(1+return)^nPresent value in year 1  =  = 11.61Present value in year 2 =…

Q: Earnings per common share of ABC Industries for the current year are expected to be $2.05 and to…

A: Earnings per share = $2.05Growth rate = 9.5%Dividend payout ratio = 35%2nd stage growth rate =…

Q: You are valuing an investment that will pay you $26,000 per year for the first 9 years, $34,000 per…

A: Present value refers to the current value of the cash flow. The present value is determined by…

Q: Assuming XYZ is willing to wait and risk not being able to acquire the building, how many years from…

A: Net Present Value (NPV) is a financial concept widely used in investment analysis and capital…

Q: When Marilyn Monroe died, ex-husband Joe DiMaggio vowed to place fresh flowers on her grave every…

A: A series of payments made over a period with equal intervals of time is an annuity. The present…

Q: The W.C. Pruett Corp. has $850,000 of interest-bearing debt outstanding, and it pays an annual…

A: TIE is used for the Time Interest Earned ratio where this ratio helps in measuring the firm's…

Q: The Gergen Group's 5-year bonds yield 6.85%, and 5-year T-bonds yield 4.75%. The real risk-free rat…

A: Yield depends on the risk involved in the bond and these risks may include inflation, default and…

Q: Time to grow: Zephyr Sales Company has currently reported sales of $1.125 million. If the company…

A: We need to use the following financial keys in financial calculator to calculate number of years to…

Q: Suppose you purchase a 10-year bond with 6.1 % annual coupons. You hold the bond for four years, and…

A: A bond is a debt market security that promises the investor a fixed set of payments until its…

Q: A car dealer offers payments of $325 per month for 72 months on a $32,000 purchase of a car, but you…

A: Annual percentage rate (APR):The annual percentage rate (APR) is a key measure of the cost of…

Q: A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a…

A: Expected return on stock funds = 22%Expected return on bond funds = 12%Standard deviation of stock…

Q: Gerry likes driving small cars and buys nearly identical ones whenever the old one needs replacing.…

A: Equivalent annual cost (EAC):The equivalent annual cost (EAC) is a financial metric that helps…

Q: 4. An 11-year bond of a firm in severe financial distress has a coupon rate of 10% and sells for…

A: Bonds are classified as fixed-income instruments, which are issued by an organization to meet their…

Q: Russell’s has annual revenue of $387,000 with costs of $216,400. Depreciation is $48,900 and the tax…

A: We need to calculate enterprise value and EBITDA by using equation below.Enterprise value (EV) =…

Q: a. Calculate the portfolio return over the 4-year period for each of the 3 alternatives. % (Round to…

A: YearAsset AAsset BAsset C20218%10%4%202210%8%6%202312%6%8%202414%4%10%Required:Portfolio Return of…

Q: Last year, Rocket Inc. earned a 20% return. Farmer's Corp. earned 10%. The overall market return…

A: The potential returns that could be achieved given the market risk premium(MRP), the beta value of…

Q: -n though most corporate bonds in the United States make coupon payments semiannually, bonds issued…

A: Price of bond is present value of coupon payment plus present value of face value of bond based on…

Q: Stocks A and B have the following historical returns: Year Stock A's Returns, rA Stock B's Returns,…

A: A portfolio is a mix of financial assets that a person, business, or other entity has, including…

Q: rrimon Industries bonds have 5 years left to maturity. Interest is paid annually, and the bonds have…

A: YTM is the yield to maturity. It is the return earned from a bond if holding it till maturity.Bond…

Q: What's the interest rate of a 5-year, annual $4,200 annuity with present value of $16,000? (Use a…

A: Solution:-When an equal amount is paid each period, it is known as annuity.We know, present value of…

Q: Here is a small part of the order book for Mesquite Foods: Bid Price Size 100 200 Size Price $…

A: The stock market serves several crucial purposes in the financial system:Capital Raising: Publicly…

Q: Greg is considering another bond, Bond D. It has an 8% semiannual coupon and a $1,000 face value.…

A: Yield to maturity refers to the total return of a bond that is expected by the investor by holding…

Q: Ten years ago J-Bar Company purchased a lathe for $250,000. It was being depreciated on a…

A: Initial Investment is that amount which is required to invest in zero period by the investor to…

Q: Amortization Schedule Consider a $25,000 loan to be repaid in equal installments at the end of each…

A: Amortization table represents the systematic presentation and calculation of loan repayment amount…

Q: Friar Corp. sells two products. Product A sells for $60 per unit, and has unit variable costs of…

A: 1.Contribution per unit = Selling price per unit - Variable cost per unit.2.Profit = Total…

Q: For many companies, it is not appropriate to assume that dividends will grow at a constant rate.…

A: Terminal value is calculated as follows:-Terminal value = whereD=dividendg= growth rater=cost of…

Q: Gluon Inc. is considering the purchase of a new high pressure glueball. It can purchase the glueball…

A: Equivalent annual cost refers to the cost incurred for owning, operating, and the maintenance of an…

Q: Lear, Inc. has $1,000,000 in current assets, $430,000 of which are considered permanent current…

A: It is the income earned by an entity after incurring all the expenses. It is the net revenue left…

Q: A portfolio is equally invested in 4 assets: Alphabet (Google) stock with a beta of 1.05, Macy's…

A: We are given the following data -StockBetaAlphabet1.05Macy1.51American Airlines2.04Risk-free…

Q: Broussard Skateboard's sales are expected to increase by 15% from $7.6 million in 2019 to $8.74…

A: AFN equation is used to calculate additional funding required for keeping growth in sales.Total…

Q: An insurance company must make payments to a customer of $9 million in one year and $6 million in…

A: Bond immunization is a risk management strategy used to protect a bond portfolio from interest rate…

Q: Brooke Corporation has the following data: Net income 17,600 Preferred dividends 9,600 Average…

A: Variables in the question:Net income=$ 17600Preferred dividends=$9600Average common stockholders'…

Q: A local Sports Authority ordered 50 pairs of tennis shoes from Nike Corporation. The shoes were…

A: In this scenario, we will calculate the amount that the local Sports Authority should have paid to…

Q: 8. Ordinary annuity payment. Fill in the missing annuity values in the following table for an…

A: Ordinary annuity is a series of payments made at the end of each period at equal intervals of time.

Q: Reno Revolvers has an EPS of $2.00, a free cash flow per share of $4.50, and a price/free cash flow…

A: Solution:Price earnings (P/E) ratio shows that how many times the share price is trading in the…

Q: In each of the following cases, calculate the price of one share of the foreign stock measured in…

A: The exchange rate between currencies refers to the amount of one currency that is required to…

Q: You are considering taking out a loan of $16,000.00 that will be paid back over 8 years with monthly…

A: Loans are paid by equal fixed periodic payments that carry the payment of interest and also payment…

Q: Fixed-income securities consist of debt instruments and preferred stock. Bonds are debt secur…

A: The percentage of bonds issued by a certain class of issuers, such as governments or businesses,…

Q: A company has a convertible bond outstanding with a conversion price of $50 and maturity in 10…

A: Floor value of bond is the present value of coupon payments plus present value of par value of bond.

Q: Cobalt Industries had sales of 148,100 units at a price of $9.08 per unit. It faced fixed operating…

A: Here, ParticularsValuesSales units148100.00Selling price per unit $  9.08Fixed operating costs $…

Q: Jake’s Shipping, Inc. needs to purchase a new fleet of light trucks for its shipping business. The…

A: To determine which truck Jake's Shipping, Inc. should choose based on Equivalent Annual Cost (EAC),…

Q: You are considering an investment with the following characteristics. The investment will cost you…

A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…

Q: Leon and Heidi decided to invest $3,250 annually for only the first eight years of their marriage.…

A: Solution:-When an equal amount is invested each periodat end of period, it is called ordinary…

Q: Today, Thomas deposited $130,000 in a three-year, 12% investment account that compounds quarterly.…

A: Future value refers to the estimated monetary worth of an investment or asset at a specified point…

Q: McConnell Corporation has bonds on the market with 16.5 years to maturity, a YTM of 6.3 percent, a…

A: Bond price is the aggregate of present value of all coupon payments and present value of face value…

Q: A mortgage loan in the amount of $100,000 is made at 6 percent interest for 20 years. Payments are…

A: Amortization is the process of gradually paying off a debt or loan through regular, scheduled…

Q: A company has a convertible bond outstanding with a conversion price of $50 and maturity in 10…

A: Floor value of bond is the present value of coupon payments plus present value of par value of bond.

Q: Using​ annual, semiannual, and quarterly compounding​ periods, (1) calculate the future value if…

A: The effective rate is the actual interest rate earned or paid on a financial. It takes into account…

Q: rporation has no debt on its balance sheet in 2008, but paid $1.6 billion in taxes. Assume that…

A: Debt is the amount of borrowing or debt that attracts interest but interest can be deducted as an…

Q: Tinsley, Incorporated, wishes to maintain a growth rate of 12 percent per year and a debt-equity…

A: Return on equity = Profit margin / Total assets to sales * (1+Debt equity ratio)Retention ratio =…