Suppose that you have just purchased a share of stock for $40. The most recent dividend was $2 and dividends are expected to grow at a rate of 5% indefinitely. What must your required return be on the stock?

“I want to get to a point, and I don’t know why I’m old-fashioned, but I want to get to a point someday where my wife’s not working, and hopefully sooner than later.” According to Kaufman and White, which type of father would say this statement?

The cost that occurs when a new project reduces the cash flow of an existing project is called:

Supreme Marketing Enterprise’s stock is listed on the NASDAQ. The firm’s existing shares are traded in the which one of the following markets?    

A bond sold five weeks ago for $1,100. The bond is worth $1,150 in today’s market. Which of the following is TRUE?

A project costs $100,000, will be depreciated straight-line to zero over its 4 year life, and will require a net working capital investment of $5,000 up-front. The firm has a tax rate of 35% and a required return of 15%. The project generates an annual operating cash flow (OCF) of $45,000. What is the project’s NPV?

Which one of the following bonds has the LEAST amount of interest rate risk?

Suppose that you have just purchased a share of stock for $50. The most recent dividend was $2 and dividends are expected to grow at a rate of 3% indefinitely. What must your required return be on the stock?

Suppose that you have just purchased a share of stock for $75. The most recent dividend was $5 and dividends are expected to grow at a rate of 2% indefinitely. What must your required return be on the stock?

The following two bonds (A and B) make semi-annual payments. They are both identical, except for the coupon rate. What is the price of bond B?  Note: find bond A’s missing yield to maturity (YTM) first, use it for bond B’s YTM, then find bond B’s price. All variables have to be entered in half-year terms! Do not round you intermediate answers.                                                                         Bond A           Bond B                         Face Value                        $1,000             $1,000                         Coupon Rate as APR        10%                8%                         Years to maturity                  25                  25                         Price                            $1,200.00                    ?