How much did you borrow for your house - Expert Answers

How much did you borrow for your house - Expert Answers

How much did you borrow for your house if your monthly mortgage payment for a 30 year mortgage at 6.65% APR is $1,600?

A   $218,080
B $202,503
C $186,926
D $233,658
E $249,235
F $264,812

Shady Rack Inchas a bond outstanding with 9.75 percent coupon, paid semiannually, and 17 years to maturityThe market price of the bond is $1,042.43.Calculate the bond’s yield to maturity (YTM)Now, if due to changes in market conditions, the market required YTM suddenly increases by 2% from your calculated YTM, what will be the percent change in the market price oFthe bond?

B -16.39%
C -17.76%
D -14.01%
E -15.66%
F -14.87%

Sanaponic, Incwill pay a dividend of $6 for each of the next 3 years, $8 for each of the years 4-7, and $10 for the years 8-10 Thereafter, starting in year 11, the company will pay a constant dividend of $5/year forever If you require 12 percent rate of return on investments in this risk class, how much is this stock worth to you?

Your required rate of return is 15%. What is the net present value of a project with the following cash flows? 
Year 0 1 2 3 4 5
Cash Flow -750 450 350 150 125 -100

A 26.33
B 72.15
C 15.56
D 60.27
E 48.68
F 37.37

Please use the following information for this and the following two questions.
BB Lean has identified two mutually exclusive projects with the following cash flows.
Year 0 1 2 3 4 5 Cash Flow Project A -52,000.00 18,000.00 17,000.00 15,000.00 12,000.00 9,000.00
Cash Flow Project B
-52,000.00 17,800.00 10,000.00 12,000.00 17,000.00
The company requires a 11.5% rate of return from projects of this risk.

What is the NPV of project A?


B 417.37

C 1,395.64

D 1,624.90

E 5,180.35

F 972.57

What is the IRR of project B?

C 13.05%
D 20.80%
E 13.90%
F 14.68%

At what discount rate would you be indifferent between these two projects?

C 13.5250%
D 26.0812%
E 14.7386%
F 15.8950%

A bond with a face value of $1,000 has annual coupon payments of $100It was issued 10 years ago and has 7 years remaining to maturityThe current market price for the bond is $1,000Which of the following is true: Its YTM is 10%IIBond’s coupon rate is 9.5%IIIThe bond’s current yield is 10%.

AI, II  Only
B I, III  Only
C I, II, and III
D III  Only
E I  Only
F II, III  Only

Riverhawk Corporation has a bond outstanding with a market price of $1,250.00 The bond has 10 years to maturity, pays interest semiannually, and has a yield to maturity of 9% What is the bond’s coupon rate?

B 11.31%
C 9.77%
D 10.54%
E 12.08%
F 12.84%

You purchased a stock for $20 per shareThe most recent dividend was $2.50 and dividends are Eexpected to grow at a rate of 8% indefinitelyWhat is your required rate of return on the stock?

C 17.00%
D 18.38%
E 19.25%
F 20.27%

Sales and profits of Growth Incare expected to grow at a rate of 25% per year for the next six years but the company will pay no dividends and reinvest all earnings. After that, the dividends will grow at a constant annual rate of 7%At the end of year 7, the company plans to pay its first dividend of $4.00 per shareIf the required return is 16%, how much is the stock worth today?

B $15.96
C $20.52
D $25.08
E $18.24
F $13.68

Apple Sink Inc(ASI) just paid a dividend of $2.50 per share Its dividends are expected to grow at 26% a year for the next two years, 24% a year for the years 3 and 4, 16% for year 5, and at Aconstant rate of 6% per year thereafter What is the current market value of the ASI’s stock iFcompanies in this risk class have a 16% required rate of return?

B $48.35
C $51.29
D $45.54
E $54.27
F $42.87

The Retarded Company’s dividends are declining at an annual rate of 6 percent The company just paid a dividend of $4 per share You require a 16 percent rate of return How much will you pay for this stock?

B $19.20
C $17.09
D $15.33
E F$12.57

The dividend yield of a stock is 9 percentIf the market price of the stock is $18 per share and its dividends have been growing at a constant rate of 6%, what was the most recent dividend paid by the company?

B $1.53
C $1.02
D $1.70
E $1.19
Last year, Jen and Berry Inchad sales of $45,000, cost of goods sold (COGS) of 12,000, depreciation charge of $3,000 and selling, general and administrative (SG&A) cost of $10,000.
The interest costs were $2,500Twenty percent of SG&A costs are fixed costsIf its sales arEexpected to be $60,000 this year, what will be the estimated SG&A costs this year?

B $12,000
C $10,636
D $11,500
E $14,250
F $13,250

You require a risk premium of 3.5 percent on an investment in a companyThe pure rate oFinterest in the market is 2.75 percent and the inflation premium is 3 percent US Treasury bills are risk freeWhat should be the yield of the US Treasury bills? Use multiplicative form.

B 6.09%
C 5.06%
D 6.35%
E 5.32%
F 5.83%

Bonds X and Y are identical, including the risk class. The only difference between A and B is in th coupon payment as shown below
  Bond X Bond Y
Face value $1,000 $1,000
Annual Coupon Payment $120 $130
Payment Frequency Semiannual Annual
Years to maturity 15 15
Price $919.43 ? 
What is the price of bond Y?

B $940.92
C $1,007.15
F $989.75  
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