Running head: MACROECONOMICS
TITLE:
COURSE:
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STUDENTS NAME:
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MACROECONOMICS
2
1. Consider a macro economy was initially at equilibrium level of real GDP. Using an
aggregate demand and aggregate supply diagram or model of the e

[Question]
Maxwell Communications paid a dividend of $3 last year. Over the next 12 months, the
dividend is expected to grow at 8 percent, which is the constant growth rate for the firm
(g). The new dividend after 12 months will represent D1. The required

[Question]
Ecology Labs Inc. will pay a dividend of $6.40 per share in the next 12 months (D1). The
required rate of return (Ke) is 14 percent and the constant growth rate is 5 percent.
a. Compute P0.
(For parts b, c, and d in this problem, all variables

[Question]
X-Tech Company issued preferred stock many years ago. It carries a fixed dividend of
$12.00 per share. With the passage of time, yields have soared from the original 10 percent
to 17 percent (yield is the same as required rate of return).
a. Wh

[Question]
You are called in as a financial analyst to appraise the bonds of Olsens Clothing Stores.
The $1,000 par value bonds have a quoted annual interest rate of 10 percent, which is paid
semiannually. The yield to maturity on the bonds is 10 percent

[Question]
North Pole Cruise Lines issued preferred stock many years ago. It carries a fixed dividend
of $6 per share. With the passage of time, yields have soared from the original 6 percent to
14 percent (yield is the same as required rate of return).
a

[Question]
Heather Smith is considering a bond investment in Locklear Airlines. The $1,000 par
value bonds have a quoted annual interest rate of 11 percent and the interest is paid
semiannually. The yield to maturity on the bonds is 14 percent annual inte

[Question]
Evans Emergency Response bonds have 6 years to maturity. Interest is paid semiannually.
The bonds have a $1,000 par value and a coupon rate of 8 percent. If the price of the bond
is $1,073.55, what is the annual yield to maturity?
[Answer]
Semi

[Question]
Stilley Resources bonds have 4 years left to maturity. Interest is paid annually, and the
bonds have a $1,000 par value and a coupon rate of 5 percent. If the price of the bond is
$841.51, what is the yield to maturity?
[Answer]
N
4
10%
I/Y
CPT

[Question]
Justin Cement Company has had the following pattern of earnings per share over the last
five years:
Year
Earnings per Share
2006 . $5.00
2007 5.30
2008 5.62
2009 5.96
2010 6.32
The earnings per share have grown at a constant rate (on a rounded

[Question]
A firm pays a $4.80 dividend at the end of year one (D1), has a stock price of $80, and a
constant growth rate (g) of 5 percent. Compute the required rate of return (Ke).
[Answer]
Ke
Ke
D1
g
P0
$4.80
5% 6% 5% 11.00%
$80.00

[Question]
A firm pays a $1.50 dividend at the end of year one (D1), has a stock price of $155 (P0),
and a constant growth rate (g) of 10 percent.
a. Compute the required rate of return (Ke).
Indicate whether each of the following changes would make the r

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It was initially established, and now works more than 600 of its own chocolate boutiques
and shops comprehensively. The chocolatier has secured a specific specialty spot in the desserts
and chocolate industry. While

Context
It is the data flowing through applications that defines the business value of an
enterprise systems. All organizations of any size will have a complex set of disparate
systems and technologies, including Enterprise Resource Planning (ERP), Human

Report:
The descriptive statistics plays a key role in determining the type of analysis which
should be performed for the given data. As most of the advanced analysis like hypothesis testing,
confidence interval etc. needs some assumption of the data thus

Windows to UNIX Connectivity
A CATIA administrator or user on Windows may wish to access a UNIX server to run a command or custom script
that manipulates a CATIA file. This can be done with a command line shell accessed by using a terminal or terminal
emu

[Question]
Surgical Supplies Corporation paid a dividend of $1.12 per share over the last 12 months.
The dividend is expected to grow at a rate of 25 percent over the next three years
(supernormal growth). It will then grow at a normal, constant rate of 7

[Question]
Beasley Ball Bearings paid a $4 dividend last year. The dividend is expected to grow at a
constant rate of 2 percent over the next four years. The required rate of return is 15 percent
(this will also serve as the discount rate in this problem)

[Question]
Mel Thomas, the chief financial officer of Preston Resources, has been asked to do an
evaluation of Dunning Chemical Company by the president and Chair of the Board, Sarah
Reynolds. Preston Resources was planning a joint venture with Dunning (w

[Question]
Trump Office Supplies paid a $3 dividend last year. The dividend is expected to grow at a
constant rate of 7 percent over the next four years. The required rate of return is 14 percent
(this will also serve as the discount rate in this problem)

[Question]
Bonds issued by the Coleman Manufacturing Company have a par value of $1,000, which
of course is also the amount of principal to be paid at maturity. The bonds are currently
selling for $690. They have 10 years remaining to maturity. The annual

[Question]
Lance Whittingham IV specializes in buying deep discount bonds. These represent bonds
that are trading at well below par value. He has his eye on a bond issued by the Leisure
Time Corporation. The $1,000 par value bond pays 4 percent annual int

[Question]
Essex Biochemical Co. has a $1,000 par value bond outstanding that pays 15 percent
annual interest. The current yield to maturity on such bonds in the market is 17 percent.
Compute the price of the bonds for the following maturity dates:
a. 30

[Question]
Barrys Steroids Company has $1,000 par value bonds outstanding at 16 percent interest.
The bonds will mature in 40 years. If the percent yield to maturity is 13 percent, what
percent of the total bond value does the repayment of principal repre

[Question]
Midland Oil has $1,000 par value bonds outstanding at 8 percent interest. The bonds will
mature in 25 years. Compute the current price of the bonds if the present yield to maturity
is:
a. 7 percent.
b. 10 percent.
c. 13 percent.
[Answer]
Midlan

[Question]
The Lone Star Company has $1,000 par value bonds outstanding at 10 percent interest.
The bonds will mature in 20 years. Compute the current price of the bonds if the present
yield to maturity is:
a. 6 percent.
b. 9 percent.
c. 13 percent.
[Answ

[Question]
Exodus Limousine Company has $1,000 par value bonds outstanding at 10 percent
interest. The bonds will mature in 50 years. Compute the current price of the bonds if the
percent yield to maturity is:
a. 5 percent.
b. 15 percent.
[Answer]
Exodus

[Question]
What approaches can be taken in valuing a firms stock when there is no cash dividend
payment?
[Answer]
In valuing a firm with no cash dividend, one approach is to assume that at some point in
the future a cash dividend will be paid. You can the

[Question]
How is the supernormal growth pattern likely to vary from the normal, constant growth
pattern?
[Answer]
A supernormal growth pattern is represented by very rapid growth in the early years of a
company or industry that eventually levels off to m

[Question]
What factors might influence a firms price-earnings ratio?
[Answer]
The price-earnings ratio is influenced by the earnings and sales growth of the firm, the risk
(or volatility in performance), the debt-equity structure of the firm, the dividen