Suppose an investment will pay $11,000 in 23 years from now. If you can earn 15.75% interest compounded monthly by depositing your money in a bank, how much should you pay for the investment today?
Wendy has $23,000.00 invested in a bank that pays 9.75% annually. How long will it take for her funds to triple?
Everest Inc. is presently enjoying relatively high growth because of a surge in the demand for its new product. Management expects earnings and dividends to grow at a rate of 28% for the next 2 years, 19.35% in year 3 and 4 and after which competition will probably reduce the growth rate in earnings and dividends to constant growth rate of 6.00%. The company’s last dividend was $1.90, its beta is 1.75, the market risk premium is 8.05%, and the riskfree rate is 5.75%. What is the current price of the common stock?
Sadik Inc.’s bonds currently sell for $1,168.40 and have a par value of $1000. They pay a $105.00 annual coupon and have a 12year maturity, but they can be called in 8 years at $1,303.00. What is their yield to call (YTC)?
Everrest Inc.’s stock has a 53% chance of producing a 14.25% return, a 25% chance of producing a 27.50% return, and a 22% chance of producing a –4.25% return. What is the firm’s expected rate of return?
Consider the following information and then calculate the required rate of return for the Global Equity Fund, which includes 4 stocks in the portfolio. The market’s required rate of return is 9.00%, the riskfree rate is 4.55%, and the Fund’s assets are as follows:
Stock

Investment

Beta

A

$195,000

1.45

B

$315,000

0.85

C

$535,000

–0.45

D

$1,130,000

2.18

You were analyzing a stock and came up with the following probability distribution of the stock returns. What is the coefficient of variation on the company’s stock?
State of the Economy 
Probability of State Occurring

Stock’s Expected Return

Boom 
31%

27%

Normal 
47%

15%

Recession 
22%

8%

What’s the future value of $20,000 after 8 years if the appropriate interest rate is 5.75%, compounded annually?
Your uncle is about to retire, and he wants to buy an annuity that will provide him with $7,000 of income a year for 21 years, with the first payment coming immediately. The going rate on such annuities is 5.25%. How much would it cost him to buy the annuity today?
Ezzell Enterprises’ noncallable bonds currently sell for $1,176.75. They have a 5year maturity, semiannual coupon rate of 12.00%, and a par value of $1000. What is the bond’s capital gain or loss yield?
A stock is expected to pay a dividend of $1.10 at the end of the year. The required rate of return is r_{s} = 12.57%, and the expected constant growth rate is g = 3.0%. What is the stock’s current price?