O’brien ltd.’s outstanding bonds have a $1,000 par value, and they

 All Finance Questions Solution In Excel Sheet (***** 100 % Correct *****)

Don't use plagiarized sources. Get Your Custom Essay on
O’brien ltd.’s outstanding bonds have a $1,000 par value, and they
Just from $13/Page
Order Essay



3. How many years would it take $50 to triple if you invested it in a bank that pays 8.25% per year?


4. You want to buy a new sports car 4 years from now, and you plan to save $4,400 per year,beginning immediately. You will make 4 deposits in an account that pays 5.75% interest. Under these assumptions, how much will you have 3 years from today?



5. What’s the present value of a 5-year ordinary annuity of $2,250 per year plus an additional $3,500 at the end of Year 5 if the interest rate is 6%?



6. What’s the future value of $2,500 after 5 years if the appropriate interest rate is 7.5%, compounded semiannually?



7. An investment promises the following cash flow stream: $1500 at Time 0; $2,750 at the end of Year 1 (or at t = 1); $3,150 at the end of Year 2; and $4,800 at the end of Year 3. At a discount rate of 10.0%, what is the present value of the cash flow stream?





8. Suppose you are buying your first house for $250,000, and are making a $50,000 down payment. You have arranged to finance the remaining amount with a 10-year, monthly payment, amortized mortgage at a 3.4% nominal interest rate. What will your equal monthly payments be?



9. You plan to borrow $30,000 at an 8% annual interest rate. The terms require you to amortize the loan with 10 equal end-of-year payments. How much interest would you be paying in Year 4?



10. You just deposited $4,000 in a bank account that pays a 6% nominal interest rate, compounded quarterly. If you also add another $9,000 to the account one year (12 months) from now and another $7,500 to the account two years from now, how much will be in the account three years (12 quarters) from now?


 11. Your sister turned 35 today, and she is planning to save $6,000 per year for retirement, with the first deposit to be made one year from today. She will invest in a mutual fund that will provide a return of 8.5% per year. She plans to retire 30 years from today, when she turns 65, and she expects to live for 25 years after retirement, to age 90. Under these assumptions, how much can she spend in each year after she retires? Her first withdrawal will be made at the beginning of her first retirement year.




12. You anticipate that you will need $2,000,000 when you retire 40 years from now. You plan to make 40 deposits, beginning today, in a bank account that will pay 7% interest, compounded annually. You expect to receive annual raises of 4%, so you will increase the amount you deposit each year by 4%. (That is, your 2nd deposit will be 4% greater than your first, the 3rd will be 4% greater than the 2nd, etc.) How much must your 1st deposit be if you are to meet your goal?




14. Medium Size Retailers, Inc. (MSR) has EBIT of $225,000, interest expense of $30,000, dividend income of $15,000, short term capital gains of $15,000, and long term capital losses of $18,000. What is MSR’s income tax liability?




15. Frederickson Office Supplies recently reported $12,500 of sales, $7,250 of operating costs other than depreciation, and $1,750 of depreciation. The company had no amortization charges and no non-operating income. It had $8,000 of bonds outstanding that carry a 9.0% interest rate, and its federal-plus-state income tax rate was 40%. How much was the firm’s taxable income, or earnings before taxes (EBT)?




16. Over the years, Janjigian Corporation’s stockholders have provided $19,250 of capital, part when they purchased new issues of stock and part when they allowed management to retain some of the firm’s earnings. The firm now has 1,500 shares of common stock outstanding, and it sells at a price of $48.00 per share. How much value has Janjigian’s management added to stockholder wealth over the years, i.e., what is Janjigian’s MVA?


 18. HHH Inc. reported $14,500 of sales and $7,025 of operating costs (including depreciation). The company had $18,750 of investor-supplied operating assets (or capital), the weighted average cost of that capital (the WACC) was 9.5%, and the federal-plus-state income tax rate was 35%. What was HHH’s Economic Value Added (EVA), i.e., how much value did management add to stockholders’ wealth during the year?




19. Wells Water Systems recently reported $8,750 of sales, $4,750 of operating costs other than depreciation, and $1,100 of depreciation. The company had no amortization charges, it had $3,250 of outstanding bonds that carry a 6.75% interest rate, and its federal-plus-state income tax rate was 35%. In order to sustain its operations and thus generate sales and cash flows in the future, the firm was required to spend $750 to buy new fixed assets and to invest $250 in net operating working capital. How much free cash flow did Wells generate?




An investor is considering starting a new business. The company would require $500,000 of assets, and it would be financed entirely with common stock. The investor will go forward only if she thinks the firm can provide a 17.5% return on the invested capital, which means that the firm must have an ROE of 17.5%. How much net income must be expected to warrant starting the business?




23. Helmuth Inc.’s latest net income was $1,250,000, and it had 295,000 shares outstanding. The company wants to pay out 40% of its income as dividends. What dividend per share should it declare?




24. Heaton Corp. sells on terms that allow customers 45 days to pay for merchandise. Its sales last year were $525,000, and its year-end receivables were $70,000. If its DSO is less than the 45-day credit period, then customers are paying on time. Otherwise, they are paying late. By how much are customers paying early or late? Base your answer on this equation: DSO – Credit period = days early or late, and use a 365-day year when calculating the DSO. A positive answer indicates late payments, while a negative answer indicates early payments.



25. Last year Mason Inc. had a total assets turnover of 1.33 and an equity multiplier of 1.75. Its sales were $195,000 and its net income was $8,549. The CFO believes that the company could have operated more efficiently, lowered its costs, and increased its net income by $4,950 without changing its sales, assets, or capital structure. Had it cut costs and increased its net income in this amount, by how much would the ROE have changed?



Rick Kish has a $100,000 stock portfolio. $32,000is invested in a stock with a beta of 0.85 and the remainder is invested in a stock with a beta of 1.75. These are the only two investments in his portfolio. What is his portfolio’s beta?




29. ABC Company’s stock has a beta of 1.40, the risk-free rate is3.75%, and the market risk premium is6.50%. What is ABC’s required rate of return using CAPM?




31. Hocking Manufacturing Company has a beta of 0.65, while Levine Industries has a beta of 1.70. The required return on the stock market is 10.00%, and the risk-free rate is 4.25%. What is the difference between Hocking’s and Levine’s required rates of return?




32. Rodriguez Roofing’s stock has a beta of 1.30, its required return is 11.50%, and the risk-free rate is4.00%. What is the required rate of return on the stock market?




35. Garvin Enterprises’ bonds currently sell for $875. They have a 6-year maturity, an annual coupon of $65, and a par value of $1,000. What is their current yield?



36. Sadik Inc.’s bonds currently sell for $1,250 and have a par value of $1,000. They pay a $135 annual coupon and have a 15-year maturity, but they can be called in 8 years at $1,135. What is their yield to call (YTC)?



37. Moerdyk Corporation’s bonds have a 20-year maturity, a 6.25% coupon rate with interest paid semiannually, and a par value of $1,000. The nominal required rate of return on these bonds is 8.25%. What is the bond’s intrinsic value?

38. Niendorf Corporation’s 5-year bonds yield 7.75%, and 5-year T-bonds yield 4.80%. The real risk-free rate is r* = 2.75%, the inflation premium for 5-year bonds is IP = 1.65%, the default risk premium for Niendorf’s bonds is DRP = 1.50% versus zero for T-bonds, and the maturity risk premium for all bonds is found with the formula MRP = (t – 1) x 0.1%, where t = number of years to maturity. What is the liquidity premium (LP) on Niendorf’s bonds?



39. A 20-year, $1,000 par value bond has an 8.5% coupon rate with interest paid semiannually. The bond currently sells for $800. What is the capital gains yield on these bonds?



40. O’Brien Ltd.’s outstanding bonds have a $1,000 par value, and they mature in 15 years. Their nominal yield to maturity is 9.75%, they pay interest semiannually, and they sell at a price of $900. What is the bond’s nominal (annual) coupon interest rate?






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:

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.


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.


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.


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.


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.