Purchase Solution

# Lease, cost of stock, dividend yield, yield on a bond

Not what you're looking for?

1. You are leasing a machine for your business. It will cost the lessor \$15,000 to be carried for a 6 year. lease term, and you will be putting down 40.00%. What will the annual rental charge be to you if the lessor pays 15% and must earn profits and risk of 5% on the deal?

2. A preferred stock issue was sold 2 years ago by your firm for a price of \$25.00. The current market price of preferred issue is \$17.00. The stock has a par value of \$25.00 and a coupon rate stated at 5.00%. What is the cost of the issue (kps). What was the cost when it was issued, if you paid \$4.00 per share in flotation costs?

3. A common stock issue is selling currently for \$60.00. Net income amounts to 2,200,000, there are 300,000 shares outstanding. What would the dividend yield on the stock be at the following payout rates?
a) 40%
b) 20%

4. What maximum risk can you sustain if you invest in the following project?
Year 0 \$875,000 Cost
1 \$228,000 Returns
2 \$196,000 "
3 \$190,000 "
4 \$275,000 "
5 \$350,000 "

Money costs you 6.00%
Profits Desired is 4.00%

5. A bond has a 7.50% coupon rate, maturing 4 years from now. To buy this bond, you must invest \$1.025 today. What will your return on investment (yield) be?

##### Solution Summary

Answers questions dealing with Lease- annual rental, cost of preferred stock, dividend yield on the stock at different payout ratios, return on a project, yield on a bond

##### Free BrainMass Quizzes

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

##### IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)

##### Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

##### Social Media: Pinterest

This quiz introduces basic concepts of Pinterest social media

##### Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.