Common Stock, Coupon Rate, Dividends Questions
Not what you're looking for?
A bond issued by Cornwallis, Inc. 15 years ago has a coupon rate of 7% and a face value of $1,000. The bond will mature in 10 years. What is the value (to the nearest dollar) to an investor with a required return of 10%?
Alaska Power Company issued $1,000 bonds that have an annual coupon rate of 7.5%. The present market value of the bonds is $1,125. If the bonds have 15 years remaining until maturity, what is the current yield on Alaska Power Company bonds?
Creamy Custard common stock is currently selling for $75.00. It just paid a dividend of $3.65 and dividends are expected to grow at a rate of 6% indefinitely. What is the required rate of return on Creamy Custard's stock?
Kilsheimer Company just paid a dividend of $4 per share. Future dividends are expected to grow at a constant rate of 6% per year. What is the value of the stock if the required return is 12%?
H. J. Corp. common stock paid $2.50 in dividends last year (D0). Dividends are expected to grow at a 12-percent annual rate forever. If H. J.'s current market price is $40.00, what is the stock's expected rate of return (nearest .01 percent)?
A project requires an initial investment of $347,500. The project generates free cash flow of $600,000 at the end of year 3. What is the internal rate of return for the project?
Zellars, Inc. is considering two mutually exclusive projects, A and B. Project A costs $75,000 and is expected to generate $48,000 in year one and $45,000 in year two. Project B costs $80,000 and is expected to generate $34,000 in year one, $37,000 in year two, $26,000 in year three, and $25,000 in year four. Zellars, Inc.'s required rate of return for these projects is 10%. The net present value for Project B is:
Zellars, Inc. is considering two mutually exclusive projects, A and B. Project A costs $75,000 and is expected to generate $48,000 in year one and $45,000 in year two. Project B costs $80,000 and is expected to generate $34,000 in year one, $37,000 in year two, $26,000 in year three, and $25,000 in year four. Zellars, Inc.'s required rate of return for these projects is 10%. The modified internal rate of return for Project A is:
A corporate bond has a face value of $1,000 and a coupon rate of 7%. The bond matures in 10 years and has a current market price of $988. If the corporation sells more bonds it will incur flotation costs of $30 per bond. If the corporate tax rate is 40%, what is the after-tax cost of debt capital?
Purchase this Solution
Solution Summary
The solution explains various questions in finance
Purchase this Solution
Free BrainMass Quizzes
Balance Sheet
The Fundamental Classified Balance Sheet. What to know to make it easy.
Employee Orientation
Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.
Team Development Strategies
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.
Business Ethics Awareness Strategy
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.
Change and Resistance within Organizations
This quiz intended to help students understand change and resistance in organizations