# 2024 – You have an opportunity to buy a 1 000 bond which matures in 10 years The bond pays 30 every six

Final exam ACCT Time Value of Money – 2024

2024 – You have an opportunity to buy a 1 000 bond which matures in 10 years The bond pays 30 every six.

**You have an opportunity to buy a $1,000 bond which matures in 10 years. The bond pays $30 every six months. The current market interest rate is 8%. What is the most you would be willing to pay for this bond? **

**In January, 1998, Harold Black bought 100 shares of Country Homes for $37.50 per share. He sold them in January, 2008 for a total of $9,715.02. Calculate Harold’s annual rate of return. **

## >**samuel johnson invested**

## >

**Samuel Johnson invested in gold U.S. coins ten years ago, paying $216.53 for one-ounce gold “double eagle” coins. He could sell these coins for $734 today. What was his annual rate of return for this investment? **

Gary Kiraly wants to buy a new Italian sports car in three years. The vehicle is expected to cost $80,000 at that time.

## Equal quarterly installments

**Mr. Sullivan is borrowing $2 million to expand his business. The loan will be for ten years at 12% and will be repaid in equal quarterly installments. What will the quarterly payments be? **

Marcia Stubern is planning for her golden years. She will retire in 20 years, at which time she plans to begin withdrawing $60,000 annually. She is expected to live for 20 years following her retirement. Her financial advisor thinks she can earn 9% annually.

Sara Shouppe has invested $100,000 in an account at her local bank. The bank will pay her a constant amount each year for 6 years, starting one year from today, and the account’s balance will be 0 at the end of the sixth year. If the bank has promised Ms.

The Swell Computer Company has developed a new line of desktop computers. It is estimated that the cash returns generated by the new product line will be $800,000 per year for the next five years, and then $500,000 per year for 3 years after that (the cash returns occur at the end of each year).

**Kimberly Ford invested $10,000 10 years ago at 16 percent, compounded quarterly. How much has she accumulated? **

**Sponge Bob will receive a payment of $5,000 per year for 7 years beginning three years from today. At a discount rate of 9 percent, what is the present value of this deferred annuity? **

## >**fullerton company’**

**Fullerton Company’s bonds are currently selling for $1,157.75 per $1000 par-value bond. The bonds have a 10% coupon rate and will mature in 10 years. What is the approximate yield to maturity?**

**Madison Corporation has a $1000 par value bond outstanding paying annual interest of 7%. The bond matures in 20 years. If the present yield to maturity for this bond is 9%, calculate the current price of the bond using annual compounding. Use annual analysis. **

**Washington Corporation has a $1000 par value bond outstanding paying annual interest of 8%. The bond matures in 20 years. If the present yield to maturity for this bond is 10%, calculate the current price of the bond. Use annual analysis **** **

**The preferred stock of Gapers Inc. pays an annual dividend of $6.50. What is the price of the preferred stock if the required return is:**

** ****6%**

**a) ****6%**

**b) ****8%**

**c) ****10 %**

**The preferred stock of Lewis-Schultz Enterprises pays an annual dividend of $6.00. What is the required return if the market value of the preferred stock: **

## >

**a)60%**

**b)70%**

**c)80%**

**State Street Corp. will pay a dividend on common stock of $4.80 per share at the end of the year. The required return on common stock (Ke) is 13.2%. The firm has a constant growth rate of 7.2%. Compute the current price of the stock (Po). **

## <

**Simon Fixtures Corp. is expected to pay $2.00 per share in dividends at the end of the next 12 months. The growth rate in dividends is expected to be constant at 8% per year. If the stock is selling for $50 per share, what is the required rate of return?**

**Need assignment writing services that are 100% risk-free. Our writers are capable of providing the best assignment help to students in globally at best rates.**

**https://assignmentsonline.org/wp-content/uploads/2022/02/Assignment-online_logo.png 0 0 admin https://assignmentsonline.org/wp-content/uploads/2022/02/Assignment-online_logo.png admin2024-03-26 09:29:422024-04-08 13:33:492024 – You have an opportunity to buy a 1 000 bond which matures in 10 years The bond pays 30 every six**