Question 13 | 1 / 1 point |

Black Water Corp. just issued zero-coupon bonds with a par value of $1,000. The bond has a maturity of 22 years and a yield to maturity of 14.62 percent, compounded annually. What is the current price of the bond?

*Round the answer to two decimal places.*

Cost of debt A/T, B/T |

Question 14 | 1 / 1 point |

Black Hill Inc. sells $100 million worth of 13-year to maturity 11.39% annual coupon bonds. The net proceeds (proceeds after flotation costs) are $973 for each $1,000 bond. What is the before-tax cost of capital for this debt financing?

*Round the answer to two decimal places in percentage form.** **(Write the percentage sign in the “units” box)*

**You should use Excel or financial calculator.**

Beta portfolio |

Question 15 | 1 / 1 point |

John invested the following amounts in three stocks:

Security | Investment | Beta |

Stock A | $456,215 | 1.65 |

Stock B | $550,513 | 1.84 |

Stock C | $524,507 | 2.11 |

Calculate the beta portfolio.

*Round the answers to two decimal places.*

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PI |

Question 16 | 1 / 1 point |

Find the profitability index (PI) for the following series of future cash flows, assuming the company’s cost of capital is 8.33 percent. The initial outlay is $483,373.

Year 1: $185,753

Year 2: $189,885

Year 3: $123,634

Year 4: $132,577

Year 5: $133,678

*Round the answer to two decimal places.*

Value (price) of bond, semi-annually |

Question 17 | 1 / 1 point |

14 years ago, Delicious Mills, Inc. issued 30-year to maturity bonds that had a 9.32 percent annual coupon rate, paid semiannually. The bonds had a $1,000 face value. Since then, interest rates in general have changed and the yield to maturity on the Delicious Mills bonds is now 9.39 percent. Given this information, what is the price today for a Delicious Mills bond?

*Round the answer to two decimal places.*

Portfolio expected return |

Question 18 | 1 / 1 point |

Jack holds a portfolio with the following securities:

Security | Investment | Return |

Stock A | 568,880 | 7.1% |

Stock B | 507,031 | 16.5% |

Stock C | 392,412 | 7.4% |

**Calculate the expected return of portfolio.**** ***Round the answers to two decimal places in percentage form.** **(Write the percentage sign in the “units” box)*

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Project Initial Outlay, Operating cash flow, After-Tax cash flow from selling the old asset |

Question 19 | 1 / 1 point |

El Dorado Storage has the following projections for Year 1 of a capital budgeting project.

Sales $299,666

Variable costs $122,928

Fixed costs adn selling, general and administrative expenses $12,822

Depreciation Expense $26,980

Tax Rate 35%

Calculate the operating cash flow for Year 1. *Round the answer to two decimals*

Bonds quotes, bond current yield |

Question 20 | 1 / 1 point |

For a bond selling for $809, with a par value of $1,000 and a coupon rate of 12.49 percent, the current yield is _____.

*Round the answer to two decimal places in percentage form.** **(Write the percentage sign in the “units” box)*

HPR, APR, EAR |

Question 21 | 1 / 1 point |

Sarah purchased 100 shares of General Electric stock at a price of $58.65 three months ago. She sold all stocks today for $65.18. During the year the stock paid dividends of $2.31 per share. What is Sarah’s holding period return

*Round the answers to two decimal places in percentage form.** **(Write the percentage sign in the “units” box)*

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Cost of pr. stock, cost of retained earnings, cost of common equity using CAPM |

Question 22 | 1 / 1 point |

The Yo-Yo Corporation tries to determine the appropriate cost for retained earnings to be used in capital budgeting analysis. The firm’s beta is 1.25. The rate on six-month T-bills is 3.41%, and the return on the S&P 500 index is 9.57%. What is the appropriate cost for retained earnings in determining the firm’s cost of capital?

*Round the answers to two decimal places in percentage form.** **(Write the percentage sign in the “units” box)**.*

Operating, Financial, and Total Leverage |

Question 23 | 1 / 1 point |

La Cucaracha Pest Control, Inc. is reviewing its financial condition. The firm’s operating leverage is 2.78. The firm’s financial leverage was of 2.99. What is the firm’s degree of combined (total) leverage of La Cucaracha Pest Control, Inc. ?

Expected return on stock using probabilities |

Question 24 | 1 / 1 point |

Calculate the expected return on stock of Alfa Inc. :

State of the economy | Probability of the states | Percentage returns |

Economic recession | 60% | 4.2% |

Steady economic growth | 14% | 5.3% |

Boom | Please calculate it | 18.2% |

*Round the answers to two decimal places in percentage form*. *(Write the percentage sign in the “units” box)*

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Gordon Model – value of the stock, expected rate of return; one year holding period |

Question 25 | 1 / 1 point |

The last dividend of Delta, Inc. was $3.06, the growth rate of dividends is expected to be 5.64 percent, and the required rate of return on this stock is 8.39 percent. What is the stock price according to the constant growth dividend model?