Erna Company is expected to pay a dividend of $2.53 one year from today and $2.68 two years from today. The company’s sales in two years are expected to be $15,750,000. The company has a PS ratio of 1.71 times, and 524,500 shares outstanding. If the required return on the company’s stock is 11 percent, what is the current stock price?

You purchase a bond with an invoice price of $1,033. The bond has a coupon rate of 5.57 percent, it makes semiannual payments, and there are 4 months to the next coupon payment. The par value is $1,000. What is the clean price of the bond?

A company has net working capital of $2,047, current assets of $6,375, equity of $22,035, and long-term debt of $10,475. What is the company’s net fixed assets?

An investor purchases a zero coupon bond with 17 years to maturity at a price of$393.51. The bond has a par value of $1,000. What is the implicit interest for the first year? Assume semiannual compounding.

A one-time gift to your college will provide $25,000 in scholarship funds next year with that amount increasing by 2 percent annually thereafter. If the discount rate is 5.5 percent, what is the current value of this perpetual gift?

Today, June 15, you want to buy a bond with a quoted price of 98.64. The bond pays interest on January 1 and July 1. Which one of the following prices represents your total cost of purchasing this bond today?

Two annuities have equal present values and an applicable discount rate of 7.25 percent. One annuity pays $2,500 on the first day of each year for 15 years. How much does the second annuity pay each year for 15 years if it pays at the end of each year?

Racing Motors wants to save $825,000 to buy some new equipment three years from now. The plan is to set aside an equal amount of money on the first day of each quarter starting today. How much does the company need to save each quarter to achieve its goal if it can earn 4.45 percent on its savings?

Beginning three months from now, you will need $1,500 each quarter for the next four years to cover expenses. How much do you need to have saved today to meet these needs if you can earn .35 percent interest per quarter?

A bond with 16 years to maturity and a semiannual coupon rate of 5.89 percent has a current yield of 5.57 percent. The bond’s par value is $2,000. What is the bond’s price?