This

**preview**has**blurred**sections. Sign up to view the full version! View Full DocumentFINCOACH: PROBLEMS
1)
What is the present value of an annuity of $12 received at the end of each year for seven years? A
ssume a discount rate of 11 percent. The first payment will be received one year from today (roun
d to nearest $1).
A)
$25
B)
$118
C)
$40
D)
$57
2)
Savells Corporation bonds make a $60 interest payment every six months (until maturity), and pa
y $1,000 at maturity 20 years from now. What is the current price of this bond if the discount rate
is 10 percent per year compounded semi-annually?
A)
$608
B)
$850
C)
$1,172
D)
$1,133
3)
PDQ Company's preferred stock pays a perpetual annual dividend of $2 per share. If the appropr
iate discount rate for this investment is 8 percent, what is the price of one share of this stock?
A)
$16.00
B)
$0.16
C)
$25.00
D)
$0.25
E)
cannot be determined without maturity date
4)
You deposit $1,000 one time into a savings account earning a 5 percent annual rate compounded
semi-annually. How much will you have in your account at the end of ten years?
A)

This is the end of the preview. Sign up to
access the rest of the document.