CFIN300: Final Exam: Spring 2006 Version #4and consistently pays out 40% of its net income as dividends. Using the percentage of sales method, how much external financing will the firm require in the upcoming year?
40. Agency costs refer to:
41. What is the present value of $1,000,000 to be received in 3 months if the required return is 6% per year simple interest?
42. Jamie wants to sell you an investment that will pay $42 every year forever, starting in 4 years. If you require a return of 9% per year compounded annually, what is the mostthat you will be willing to pay for this investment?
a)$330.60b) $360.35c)$428.13d)$466.67e)$502.2243. Ralph A. Horse is making monthly mortgage payments of $1,500. He initially amortized the mortgage over 25 years. If the interest rate is 8% compounded semi-annually, what is the outstanding balance after 5 years?