1. You buy a bond with a par value of $1000 and a coupon rate...

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1. You buy a bond with a par value of $1000 and a coupon rate of8% with 18 coupons remaining. You hold the bond and receive 11coupons. If the bond had a YTM of 8.2% when you bought it and 9.1%when you sold it, what was your annual holding period ROR?
2. A company’s dividends will be as follows: Year 1= 2.25, Year2= $2.80, long-term growth rateafter year 2= 5.5%. If the marketrisk free rate is 5%, the market risk premium is 4%, and thecompany’s beta is 1.2, what is the intrinsic value of the firm’sstock?
3. Assume Firm A is expected to pay a dividend of $3.40 one yearfrom today. Dividend growth is projected to be 5% and its stockprice is $45. What is Firm A’s estimated cost of equity accordingto the dividend growth model?
4. Your company is considering a project that will cost $1million. The project will generate after-tax cash flows of $250,000per year for 7 years. The WACC is 14%, and the firm’s target D/Eratio is .5. The flotation cost for equity is 6%, and the flotationcost for debt is 3%. What is the NPV for the project afteradjusting for flotation costs?

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1. You buy a bond with a par value of $1000 and a coupon rate of8% with 18 coupons remaining. You hold the bond and receive 11coupons. If the bond had a YTM of 8.2% when you bought it and 9.1%when you sold it, what was your annual holding period ROR?2. A company’s dividends will be as follows: Year 1= 2.25, Year2= $2.80, long-term growth rateafter year 2= 5.5%. If the marketrisk free rate is 5%, the market risk premium is 4%, and thecompany’s beta is 1.2, what is the intrinsic value of the firm’sstock?3. Assume Firm A is expected to pay a dividend of $3.40 one yearfrom today. Dividend growth is projected to be 5% and its stockprice is $45. What is Firm A’s estimated cost of equity accordingto the dividend growth model?4. Your company is considering a project that will cost $1million. The project will generate after-tax cash flows of $250,000per year for 7 years. The WACC is 14%, and the firm’s target D/Eratio is .5. The flotation cost for equity is 6%, and the flotationcost for debt is 3%. What is the NPV for the project afteradjusting for flotation costs?