Homework Assignment 4
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9-5 The firms free cash flow is expected to grow at a constant
rate, hence we can apply a constant growth formula to
determine the total value of the firm.
Firm value
= FCF1/(WACC g)
= $150,000,000/(0.10 0.05)
= $3,000,00
Homework3
MGT325
BOND VALUATION
7-1
With your financial calculator, enter the following:
N = 10; I/YR = YTM = 9%; PMT = 0.08 1,000 = 80; FV = 1000; PV =
VB = ?
PV = $935.82.
BOND VALUATION
7-3 The problem asks you to find the price of a bond, given the fo
Hints: Assigned Chapter 6 Homework Problems
6-3 Expected interest rate.
The real risk-free rate is 3%. Inflation is expected to be 2 percent this year (Year 1) and 4
percent during the next two years (Years 2 and 3). Assume that the maturity risk premium
Question 1
(.75 points)
A stock split will cause a change in the total
0
59
MC
1
4
dollar amounts shown in which of the following balance sheet accounts (Hint: The answer for this is in Chapter 14, pages 457-458)?
a. Cash.
b. Common stock.
c. Paid-in capi