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Suppose the U.S. Treasury offers to sell you a bond for $587.25. No payments will be made until the bond matures 5 years from now, at which time it will be redeemed for $1,000. What interest rate would you earn if you bought this bond at the offer price? a. 8.35% O b.9.28% O c. 11.2396 d. 14.2396 e. 34.0696 Your father is about to retire, and he wants to buy an annuity that will provide him with $84,000 of income a year for 25 years, with the first payment coming immediately. The going rate on such annuities is 5.15%. How much would it cost him to buy the annuity today? O a. $1,226,360.01 O b. $1,250,295.77 O c. 51,189,059.22 d. 51,631,067.96 0 0 e. $1,166,295.77 Duffert Industries has total assets of $1,060,000 and total current liabilities (consisting only of accounts payable and accruals) of $115,000. Duffert finances using only long-term debt and common equity. The interest rate on its debt is 7% and its tax rate is 25%. The firm's basic earning power ratio is 18% and its debt-to-capital ratio [Long-term debt/(Long-term debt + Common Equity)] is 40%. What are Duffert's ROE and ROIC? Do not round your intermediate calculations. O a. 28.98%; 13.0496 O b. 21.74%; 15.14% c. 21.749; 20.1996 d. 33.65%; 13.50% e. 23. 1996; 15.1496 West Corporation has $50,000 that it plans to invest in marketable securities. The corporation is choosing between the following three equally risky securities: Alachua County tax-free municipal bonds yielding 8.50%; Exxon Mobil bonds yielding 10.10%; and GM preferred stock with a dividend yield of 9.40%. West's corporate tax rate is 25.00%. What is the after-tax return on the best investment alternative? Assume a 50.00% dividend exclusion for taxes on dividends. (Assume the company chooses on the basis of after-tax returns. Round your final answer to 3 decimal places.) a. 7.575% b. 8.8389 OOO O c.8.225% d. 8.50096 e. 7.05096

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