Andy deposited $3,000 this morning into an account that pays 5 percent interest, compounded annually. Barb also deposited $3,000 this morning into an account that pays 5 percent interest, compounded annually. Andy will withdraw his interest earnings and spend it as soon as possible. Barb will reinvest her interest earnings into her account. Given this, which one of the following statements is true?

Which one of the following terms is defined as the mixture of a firm’s debt and equity financing? 

If our project’s required return provides a real return of % and we expect inflation to be %, what is the nominal rate that will be required on this project?  (Report answer in percentage terms and round to 2 decimal places. Do not round intermediate calculations)

You’ve arranged a loan with your bank that requires you to make monthly payments of $ over a period of years. The loan carries an annual interest rate of %, compounded monthly. Based on these terms, what was the original amount you borrowed from the bank? (Round answer to 2 decimal places, do not round intermediate calculations)  

A bond that has only one payment, which occurs at maturity, defines which one of the following?

If our project’s required return provides a real return of % and we expect inflation to be %, what is the nominal rate that will be required on this project?  (Report answer in percentage terms and round to 2 decimal places. Do not round intermediate calculations)

ABC Corporation common stock sells for $ a share and pays an annual dividend that increases by percent annually. The market rate of return on this stock is percent. What is the amount of the next dividend? (Round answer to 2 decimal places, do not round intermediate calculations)

On the Statement of Cash Flows, which of the following are considered financing activities?I. increase in long-term debtII. decrease in accounts payableIII. interest paidIV. dividends paid 

All else constant, a bond will sell at _____ when the coupon rate is _____ the yield to maturity. 

Which one of the following statements concerning net working capital is correct?