FIN 571 Week 4 Connect Problems

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FIN 571 Week 4 Connect Problems Assignment
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1. Microhard has issued a bond with the
following characteristics Par 1,000 Time to
maturity 11 years Coupon rate 9
percent Semiannual payments Calculate the
price of this bond if the YTM is (Do not round
intermediat calculations and round your
answers to 2 decimal places, e.g.,
32.16.) Price of the Bond a. 9 percent
_____ b. 11 percent _____ c. 7 percent
_____ 2. Watters Umbrella Corp. issued
20-year bonds 2 years ago at a coupon rate of
8.4 percent. The bonds make semiannual payments.
If these bonds currently sell for 90 percent of
par value, what is the YTM? (Do not round
intermediate calculations and enter your answer
as a percent rounded to 2 decimal places, e.g.,
32.16.) YTM _____
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• Grand Adventure Properties offers a 7 percent
  coupon bond with annual payments. The yield to
  maturity is 5.85 percent and the maturity date is
  8 years from today. What is the market price of
  this bond if the face value is 1,000?
• 1,071.84
• 788.73
• 1,082.17
• 1,019.29
• 947.45
• The next dividend payment by ECY, Inc., will be
  1.64 per share. The dividends are anticipated to
  maintain a growth rate of 8 percent, forever. The
  stock currently sells for 31 per share.
• What is the required return? (Do not round
  intermediate calculations and enter your answer
  as a percent rounded to 2 decimal places, e.g.,
  32.16.)
• Required return _____

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5. The Starr Co. just paid a dividend of 1.55
per share on its stock. The dividends are
expected to grow at a constant rate of 6 percent
per year, indefinitely. Investors require a
return of 14 percent on the stock. a. What is
the current price? (Do not round intermediate
calculations and round your answer to 2 decimal
places, e.g., 32.16.) Current price _____ b.
What will the price be in three years? (Do not
round intermediate calculations and round your
answer to 2 decimal places, e.g., 32.16.) Stock
price _____ c. What will the price be in 7
years? (Do not round intermediate calculations
and round your answer to 2 decimal places, e.g.,
32.16.) Stock price _____ Find the week 4
connect problems answers here FIN 571 Week 4
Connect Problems
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• 6. The next dividend payment by ECY, Inc., will
  be 1.64 per share. The dividends are anticipated
  to maintain a growth rate of 8 percent, forever.
  The stock currently sells for 31 per share.
• What is the dividend yield? (Do not round
  intermediate calculations and enter your answer
  as a percent rounded to 2 decimal places, e.g.,
  32.16.)
• Dividend yield _____
• What is the expected capital gains yield? (Do not
  round intermediate calculations and enter your
  answer as a percent rounded to 2 decimal places,
  e.g., 32.16.)
• Capital gains yield ______
• 7. Zoom stock has a beta of 1.46. The risk-free
  rate of return is 3.07 percent and the market
  rate of return is 11.81 percent. What is the
  amount of the risk premium on Zoom stock?
• 8.09
• 12.76
• 9.59
• 10.25
• 17.24

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• The risk premium for an individual security is
  computed by
• multiplying the security's beta by the market
  risk premium.
• multiplying the security's beta by the risk-free
  rate of return.
• adding the risk-free rate to the security's
  expected return.
• dividing the market risk premium by the quantity
  (1 Beta).
• dividing the market risk premium by the beta of
  the security.
• The risk-free rate of return is 3.68 percent and
  the market risk premium is 7.84 percent. What is
  the expected rate of return on a stock with a
  beta of 1.32?
• 9.17
• 9.24
• 13.12
• 14.03
• 14.36
• Mullineaux Corporation has a target capital
  structure of 80 percent common stock and 20
  percent debt. Its cost of equity is 17 percent,
  and the cost of debt is 11 percent. The relevant
  tax rate is 35 percent.
• What is the companys WACC? (Do not round
  intermediate calculations and enter your answer
  as a percent rounded to 2 decimal places, e.g.,
  32.16.)
• WACC _____

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• 11. Miller Manufacturing has a target debtequity
  ratio of .65. Its cost of equity is 13 percent,
  and its cost of debt is 9 percent. If the tax
  rate is 40 percent, what is the companys WACC?
  (Do not round intermediate calculations and enter
  your answer as a percent rounded to 2 decimal
  places, e.g., 32.16.)
• WACC _____
• 12. Filer Manufacturing has 7 million shares of
  common stock outstanding. The current share price
  is 79, and the book value per share is 6. The
  company also has two bond issues outstanding. The
  first bond issue has a face value 70 million, a
  coupon of 8 percent, and sells for 94 percent of
  par. The second issue has a face value of 40
  million, a coupon of 9 percent, and sells for 107
  percent of par. The first issue matures in 23
  years, the second in 6 years.
• What are the company's capital structure weights
  on a book value basis? (Do not round intermediate
  calculations and round your answers to 4 decimal
  places, e.g., 32.1616.)
• Equity / Value _____
• Debt / Value _____
• What are the company's capital structure weights
  on a market value basis? (Do not round
  intermediate calculations and round your answers
  to 4 decimal places, e.g., 32.1616.)
• Equity / Value _____
• Debt / Value _____
• Which are more relevant?

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• Titan Mining Corporation has 8.8 million shares
  of common stock outstanding and 320,000 4 percent
  semiannual bonds outstanding, par value 1,000
  each. The common stock currently sells for 36
  per share and has a beta of 1.4, and the bonds
  have 10 years to maturity and sell for 117
  percent of par. The market risk premium is 7.6
  percent, T-bills are yielding 5 percent, and the
  companys tax rate is 38 percent.
• What is the firm's market value capital
  structure? (Do not round intermediate
  calculations and round your answers to 4 decimal
  places, e.g., 32.1616.)
• Weight
• Debt _____
• Equity _____
• If the company is evaluating a new investment
  project that has the same risk as the firm's
  typical project, what rate should the firm use to
  discount the project's cash flows? (Do not round
  intermediate calculations and enter your answer
  as a percent rounded to 2 decimal places, e.g.,
  32.16.)
• Discount rate _____

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education from last 5 years. This article covers
the basic of Complete Assignment FIN 571 Week 4
from UOP. Other topics in the class are as
follows FIN 571 Week 1 Quiz FIN 571 Week 2
Quiz FIN 571 Week 3 Quiz FIN 571 Week 4 Quiz FIN
571 Week 5 Quiz FIN 571 Week 6 Quiz FIN 571 Final
Exam (Newest) FIN 571 Week 1 Connect Problems FIN
571 Week 2 Connect Problems FIN 571 Week 3
Connect Problems FIN 571 Week 4 Connect
Problems FIN 571 Week 5 Connect Problems Want to
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