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15. Marvin’s Interiors issued 9-year bonds 2 years ago. The bonds have a face value of...

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Finance

15. Marvin’s Interiors issued 9-year bonds 2 years ago. Thebonds have a face value of $1,400, a 9.0 percent, semiannualcoupon, and a current market price of $1,189. What is the pre-taxcost of debt? 13.97 percent 13.02 percent 12.27 percent 13.53percent

16.

Jack's Construction Co. has 100,000 bonds outstanding that areselling at par value. The bonds yield 8.6 percent. The company alsohas 3.1 million shares of common stock outstanding. The stock has abeta of 1.2 and sells for $25 a share. The U.S. Treasury bill isyielding 5 percent and the market risk premium is 8 percent. Jack'stax rate is 35 percent. What is Jack's weighted average cost ofcapital?

3.23 percent

9.52 percent

4.76 percent

6.37 percent

11.45 percent

17.

What are the arithmetic and geometric average returns for astock with annual returns of 22 percent, 9 percent, –7 percent, and13 percent? List the arithmetic answer first.

           

9.25 percent; 12.61 percent

12.61 percent; 9.25 percent

9.25 percent; 8.73 percent

8.73 percent; 9.25 percent

12.61 percent; 8.73 percent

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