Chapter 9 Problems and Solutions
Problems:
Concept Review Questions
1. Payback Period and Net Present Value [L01, 2] If a project with conventional cash flows has a
payback period less than the project's life, can you definitively state the algebraic sign
Chapter 12 Problems and Solutions
Problems:
Concept Review Questions
1. Investment Selection [L04] Given that IDT Corporation was up by about 429 percent for 2010, why
didn't all investors hold this stock?
2. Investment Selection [L04] Given that First Ba
Chapter 7 Problems and Solutions
Problems:
Self-Test problems
7.1 Bond Values. A Microgates Industries bond has a 10 percent coupon rate and a $1,000 face value.
Interest is paid semiannually, and the bond has 20 years to maturity. If investors require a
Chapter 8 Problems and Solutions
Problems:
Concept Review Questions
4. Dividend Growth Model [L01] Under what two assumptions can we use the dividend growth model
presented in the chapter to determine the value of a share of stock? Comment on the reasonab
Chapter 6 Problems and Solutions
Problems:
Self-Test problems
6.1
Present Values with Multiple Cash Flows A first-round draft choice quarterback has been signed
to a three-year, $25 million contract. The details provide for an im mediate cash bonus of $2
Chapter 14 Problems and Solutions
Problems:
Concept Review Problems
1. WACC [L03] On the most basic level, if a firm's WACC is 12 percent, what does this mean?
2. Book Values versus Market Values [L03] In calculating the WACC, if you had to use book value
Chapter 10 Problems and Solutions
Problems:
Concept Review Questions
1. Opportunity Cost [L01] In the context of capital budgeting, what is an opportunity cost?
2. Depreciation [L01] Given the choice, would a firm prefer to use MACRS depreciation or strai
Chapter 2 Problems and Solutions
Problems:
1. Building a Balance Sheet [L01] Penguin Pucks, Inc., has current assets of $4,800, net fixed assets of
$27,500, current liabilities of $4,200, and long-term debt of $10,500. What is the value of the
shareholder
Chapter 5 Problems and Solutions
Problems:
Self-Test problems
5.1
Calculating Future Values. Assume you deposit $10,000 today in an account that pays 6 percent
interest. How much will you have in five years?
5.2
Calculating Present Values. Suppose you hav
Chapter 1 Problems and Solutions
Problems:
2. Sole Proprietorships and Partnerships [L03] What are the four primary disadvantages of the sole proprietorship
and partnership forms of business organization? What benefits are there to these types of business
Chapter 13 Problems and Solutions
Problems:
Questions and Problems
1. Determining Portfolio Weights [L01] What are the portfolio weights for a portfolio that has 145 shares
of Stock A that sell for $45 per share and 110 shares of Stock B that sell for $27
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