Today, the bond market requires a return of 7% on the 5-year bonds issued by Action Corporation. The 7% percent is referred to as

How much would you pay for a share of ABC Corporation stock today if the next dividend will be $4 per share, your required return on equity investments is 10%, and the stock is expected to be worth $90 one year from now?

A preferred stock that pays a constant dividend of $3.00 forever currently sells for $16.50. What is the required rate of return?

Your broker offers you the opportunity to purchase a bond with a coupon rate of 7% per year and a face value of $1,000. If the yield to maturity on similar bonds is 8%, this bond should:

Which of the following cash flows are included in the analysis of investment opportunities?

You presently own stock that you purchased one year ago. Your nominal return on the stock for the past year was 20%. You calculate your real return on investment was 11.50%. According to the “Fisher Effect” formula, the rate of inflation must have been _____.

Llano’s stock is currently selling for $40.00. The expected dividend one year from now is $2 and the required return is 11%. What is this firm’s dividend growth rate assuming the constant dividend growth model is appropriate?

When can the internal rate of return NOT be used as an evaluation tool in capital budgeting analysis? 

Dizzy Corp. bonds bearing an annual coupon rate of 12%, pay coupons semi-annually, have 3 years remaining to maturity, a $1,000 face value, and are currently priced at $1,150 per bond. What is the yield to maturity as an annual stated rate (APR)?

Calculate the NPV of the following project cash flow using a discount rate of 5%: Yr 0 = –$1,000; Yr 1 = –$80; Yr 2 = +$100; Yr 3 = +$400; Yr 4 = +$500; Yr 5 = +$600