Computing terminal-year FCF: Healthy Potions, Inc., a pharmaceutical company, bou
a machine at a cost of $2,000,000 five years ago that produces pain-reliever medicine
machine has been depreciated over the past five years, and the current book value
Problem 5-10 Problem 5-H 10-year, 1296 semiannual coupon bond with a par value of $1000 may be called
The Brownstone Corporations bonds have 5 years remaining to maturity. Interest is in 4years at a call once of $1060. The bond sells for $1100
Problem 5-10 Problem 5-12 A 10-year, 12% semiannual coupon bond with a par value of $1000 may be called in 4
The Brownstone Corporations bonds have 5 years remaining to maturity. Interest is years at a call price of $1060. The bond sells for $1
The Brownstone Corporations bonds have 5 years remainingto maturity.
Interest is paid annually, me bonds have a 51000 paryalue, and the coupon
Problem 5~12 A 10-year, 1296 semiannual coupon bond with a par value of $1000 may be called in Proble
The Brownstone Corporations bonds have 5 years remaining to mawrity. Interest is
paid annuallyJ d'le bonds have a 51000 par value, and the ooupon interest rate is 956.
a) What is the yield to maturity at a current market rate price of5329 or
The real risk-free rate is 15-6. lnflataun is expected to be 356 this year, 456 next year,
and then 3.556 thereafter. The maturity rislt premium is estimated td he D.DE*I[t-1!I,
where t=numlser at years tp maturity. What is the r
Prclhlem 5-H The Brcwnstcne Enrppratinns bands have 5 years remaining tc maturity.
Interest is paicl ann uallyJ the hands have a 510cc par yalue, and the ccupnn
interest rate is 956.
a 1|.|'I.|'hat is the yield to maturity at a current rnarlte
Pruhlern 514 A. hand that mature: in Tr' years sells fer 31,323. The hand has. a fate 1value elf
ELEHIH] and a yield In matu rity.I at 111.5333 percent. The band pays mu puns
semian nually. 1|.|'I.|'h.'lt is the bands current yield?
3.3513415 an nual i
Prclhlem 5-12 A 19-year; 1256 semiannual coupe-n band with a par 'H'ElLIE- at 510111 may be called
in 4years at a call price cnf 51059. The hand sells fcnr 51109 [Assume that the
hand has just been issuedl
a What is the band's yield to rnaltul'ityi-I
Working capital: The financial information for Laurel Electronics referred to in problem 3
Suppose marking-to-market reveals that the market value of the firms inventory is 20 p
value and its receivables are 25 percent below its book value. The marke
9.5 Present value of dividends: Fresno Corp. is a fast-growing company that exp
rate of 30 percent over the next two years and then slow down to a growth rate
the following three years. If the last dividend paid by the company was $2.15, e
dividends for t
7.12. The security market line: If the expected return on the
market is 10 percent and the risk-free rate is 4 percent, what
is the expected return for a stock with a beta equal to 1.5?
What is the market risk premium for the set of circumstances
Present value with multiple cash flows: Biogenesis Inc. management exp
following cash flow stream over the next five years. They discount all cash flo
percent discount rate. What is the present value of this cash flow str
Efficiency ratio: If Newton Manufacturers have an accounts receivable
turnover of 4.8 times and net sales of $7,812,379, what is its level of
Accounts receivable turnover
A/R Turnover =
8.3. Bond price: Knight, Inc., has issued a three-year bond that pays a coupon of 6.10 percent.
are made semiannually. Given the market rate of interest of 5.80 percent, what is the marke
Number of years to maturity
Market rate of interest
Investment Banking: Morrow Inc. is issuing 50,000 bonds and its investment
banker has guaranteed a price of $555 per bond. The investment banker
sells the entire issue to investors for $15,000,000.
aWhat is the underwriting spread for this issue?
10.1 Net present value: Riggs Corp. management is planning to spend $650,000
on a new marketing campaign. They believe that this action will result in
additional cash flows of $325,000 over the next three years. If the discount rate
is 17.5 percent, what
Future value: Your aunt is planning to invest in a bank deposit that will pay
7.5 percent annual interest compounded semiannually. If she has $5,000
to invest, how much will she have at the end of four years?
Present value of investment