An investment will pay $600 at the end of each of the next 2 years, $500 at the end of Year 3, and $600 at the end of Year 4.  What is its present value if other investments of equal risk earn 9 percent annually?

A firm with a 10 percent cost of capital is considering a project for this year’s capital budget.  The project’s expected after-tax cash flows are as follows: Year: 0 1 2 3 4 Cash flow: -$12,000 $5,400 $5,600 $4,100 $5,000 Calculate the project’s discounted payback period.

An annual coupon bond that matures in 20 years sells for $1,365.14.  It has a face value of $1,000 and a yield to maturity of 9 percent.  What is its current yield (CY)?

An annual coupon bond that matures in 17 years sells for $759.35.  It has a face value of $1,000 and a yield to maturity of 10 percent.  What is its current yield (CY)?

An investment will pay $900 at the end of each of the next 4 years, $800 at the end of Year 5, and $600 at the end of Year 6.  What is its present value if other investments of equal risk earn 9 percent annually?

Steve plans to retire in 20 years.  He currently has saved up $150,000, and he believes he will need $1,000,000 at retirement.  What annual interest rate must Steve earn to reach his goal, assuming he does not save any additional funds between now and retirement?

What is the present value of an ordinary annuity that pays $3,600 per year for 5 years, assuming the annual discount rate is 4 percent?

An annual coupon bond that matures in 14 years sells for $702.88.  It has a face value of $1,000 and a yield to maturity of 7.5 percent.  What is its current yield (CY)?

What is the present value of a security that will pay $11,000 in 5 years if securities of equal risk pay 5 percent annually?

Li & Sons’ common stock currently trades at $55 a share.  It is expected to pay an annual dividend of $1.93 a share at the end of the year (D1 = $1.93), and the constant growth rate is 10.2 percent a year.  What is the company’s cost of common equity if all of its equity comes from retained earnings?