exam2a.ch5ch5ach6ch7ch8 (1)

exam2a.ch5ch5ach6ch7ch8 (1) - Name _ Webct User ID _...

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Name __________________________________ Webct User ID __________________________________ University of Houston C. T. Bauer College of Business Principles of Financial Management Finance 3332 Exam 2A: Spring, 2009 To receive full credit: Show equations either in variable form or equations with numbers plugged in. Calculator financial function inputs must be shown. Clearly indicate your answer. Carry all decimals, rounding only final answer. Decimal places should be rounded to four places (two in decimal form) and currency answers rounded to the nearest cent, where applicable. Point values are in parentheses. 1.  How  much  would  an  investor  be  willing  to pay  for an  investment  which  pays  $5000  per  year   for 8 years,  with the  first paym ent  beginning  in 5 years,  if the  investor  requires  a  seven  percent   2.  Josh  bought  a  new  truck  and  borrowed  $9000  at an  annual  interest  rate  of 8 percent  for 3  years.  How  much  will be  his   monthly  paym ents?  (6) 3.  What is the  value  of JRS’s  $5  preferred  stock  if the  required  rate  of return  is eight  percent?   4.  Jackson  Incorporated’s  com m o n  stock  just paid  a  dividend  of $0.10  per  share.  What is the   value  per  share  of the  firm’s  com m on  stock  if earnings  and  dividends  are  expected  to grow  at a  rate  of four percent  for the  forese e a bl e  future,  and  investors  require  an  eleven  percent  return?   5.  You  open  an  account  which  pays  8 percent  compound e d  monthly.  What is your  effective  rate   6.  What is the  value  of the  following  cash  flow stream  if the  investor  requires  a  10  percent   Year Cash Flow 1 $1000 2  0 3  0 4 3000 7.  You  are  analyzing  a  stock  with a  beta  of 0.8.  The  risk- free  rate  is 2 percent,  and  the  market  
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exam2a.ch5ch5ach6ch7ch8 (1) - Name _ Webct User ID _...

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