Expert answer:I need help with 14 questions in Financial
Answer & Explanation:12. Fred and Ethel are both considering buying a corporate bond with a coupon rate of 8%, a facevalue of $1,000, and a maturity date of January 1, 2025. Which of the following statements isMOST correct?a. Fred and Ethel will only buy the bonds if the bonds are rated BBB or above.b. Because both Fred and Ethel will receive the same cash flows if they each buy a bond,they both must assign the same value to the bond.c. If Fred decides to buy the bond, then Ethel will also decide to buy the bond if markets areefficient.d. Fred may determine a different value for a bond than Ethel because each investor mayhave a different level of risk aversion, and hence a different required return.13. Which of the following statements is true?a. Short-term bonds have greater interest rate risk than do long-term bonds.b. Long-term bonds have greater interest rate risk than do short-term bonds.c. Interest rate risk is highest during periods of high interest rates.d. All bonds have equal interest rate risk.14. Crandle’s common stock is currently selling for $79.00. It just paid a dividend of $4.60 anddividends are expected to grow at a rate of 5% indefinitely. What is the required rate of returnon Crandle’s stock?a. 11.76%b. 11.11%c. 12.2%d. 14.21%15. An example of the growth factor in common stock is:a. retaining profits in order to reinvest into the firmb. two strong companies merging together to increase their economies of scalec. acquiring a loan to fund an investment in Asiad. issuing new stock to provide capital for future growth16. Waterfront Solutions, Inc. paid a dividend of $5.00 per share on its common stock yesterday.Dividends are expected to grow at a constant rate of 4% for the next two years, at which pointthe stock is expected to sell for $56.00. If investors require a rate of return on Waterfront’scommon stock of 18%, what should the stock sell for today?a. $40.22b. $50.22c. $44.76d. $48.5117. Andre’s parents established a college savings plan for him when he was born. They deposited$50 into the account on the last day of each month. The account has earned 10.9%compounded monthly, tax-free. How much can they withdraw on his 18th birthday to spend onhis education?a. $33,307b. $30,028c. $43,730d. $27,56018. Charlie wants to retire in 15 years, and he wants to have an annuity of $50,000 a year for20 years after retirement. Charlie wants to receive the first annuity payment the day heretires. Using an interest rate of 8%, how much must Charlie invest today in order to have hisretirement annuity (round to nearest $10).a. $167,130b. $315,240c. $256,890d. $200,450An investor currently holds the following portfolio: Amount Invested4,000 shares of Stock H $8,000 Beta = 1.37,500 shares of Stock I $24,000 Beta = 1.812,500 shares of Stock J $48,000 Beta = 2.219. The beta for the portfolio is:a. 1.45b. 1.27c. 1.99d. 1.7720. Which of the following will cause the value of a bond to increase, if other things held thesame?a. interest rates decreaseb. the company’s debt rating drops from AAA to BBBc. investors’ required rate of return increasesd. the bond is callable21. A small biotechnology research corporation has been experiencing losses for the first threeyears of its existence, and thus has a negative balance in retained earnings. The corporation’sstock price, however, is $1 per share. Which of the following statements is MOST correct?a. The required return on the stock will be small because the company has very few assets.b. Investors believe the stock is worth $1 per share because future earnings (and cash flows)are expected to be positive.c. The corporation’s accountants must have made a mistake because retained earnings maynot be negative.d. Investors are irrational to pay $1 per share when earnings per share have been negative forthree years.22. How much money must be put into a bank account yielding 6.42% (compounded annually) inorder to have $1,671 at the end of 11 years? (round to nearest $1)a. $798b. $886c. $921d. $84323. Wendy purchased 800 shares of Robotics Stock at $3 per share on 1/1/09. Wendy sold theshares on 12/31/09 for $3.45. Genetics stock has a beta of 1.3, the risk-free rate of return is3%, and the market risk premium is 8%. The required return on Genetics Stock is:a. 21.1%b. 13.4%c. 16.5%d. 17.6%24. Bart’s Moving Company bonds have a 11% coupon rate. Interest is paid semiannually. Thebonds have a par value of $1,000 and will mature 8 years from now. Compute the value ofBart’s Moving Company bonds if investors’ required rate of return is 9.5%.a. $1,133.05b. $1,098.99c. $1,082.75d. $1,197.2725. Jackson Corp. common stock paid $2.50 in dividends last year (D0). Dividends are expected togrow at a 12-percent annual rate forever. If Jackson’s current market price is $40.00, what isthe stock’s expected rate of return? (nearest .01 percent)a. 18.25%b. 5.50%c. 11.00%d. 19.00%
How it works
- Paste your instructions in the instructions box. You can also attach an instructions file
- Select the writer category, deadline, education level and review the instructions
- Make a payment for the order to be assignment to a writer
- Download the paper after the writer uploads it
Will the writer plagiarize my essay?
You will get a plagiarism-free paper and you can get an originality report upon request.
Is this service safe?
All the personal information is confidential and we have 100% safe payment methods. We also guarantee good grades