exam2c.ch5partialch5Ach6ch7ch8 - Name Peoplesoft Number...

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Name __________________________________ Peoplesoft Number __________________________________ University of Houston C. T. Bauer College of Business Finance 3332 Fall, 2010 Exam 2C To receive full credit: Show all work—equations in variable form & equations with numbers plugged in, unless instructed differently Clearly indicate your (one) answer Calculator financial function inputs must be shown. All inputs to find annuity factor must be shown Carry all decimals, rounding only final answer Decimal places should be rounded to 4 places (2 in percent form) Currency answers rounded to the nearest cent, where applicable Include applicable units ($, %, etc.) on answers Point values are in parentheses. 1.   Circle the  correct  respons e.  (2)  A twelve  year,  4 percent  coupon  bond,  with a  par  value  of $1000  sells  at $110   This  bond  is said  to be  selling  at: par a  premium a  discount 2.  Given  the  following  return  information  for Levalle  Corporation,  determine  the  stock’s  standard  deviation  of retu   assu ming  the  expected  return  is 7%.  (6) Year Return 2009 - 13% 2008 14% 2007 20% 3.  If Lonnie  needs  $10,000  in 8 years,  how  much  must  he  invest  today  if his  account  earns  7 percent,  compound   continuously?  (4)   4.  What is the  effective  rate  of interest  for 14  percent  compound e d  semi- annually?  (6) 5.  What is the  yield  to maturity of a  6 percent  annual  coupon  bond  with 15  years  to maturity if the  bond’s  market   is $758.17?  (6) 6.  You  are  analyzing  a  stock  with a  beta  of 2.2.  The  risk- free  rate  is 4 percent,  and  market  risk  premium  is 6%.  W   the  stock’s  equilibrium  required  rate  of return?  (6) 7.   You  are  considering  an  investm ent  in a  com m o n  stock  whose  current  annual  dividend  is $0.70  per  share.  Ov   coming  two years,  earnings  and  dividends  are  expe cted  to grow  at an  annual  rate  of 12  percent,  then  growth  is 
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exam2c.ch5partialch5Ach6ch7ch8 - Name Peoplesoft Number...

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