FINANCE-ABC Company's bonds pay 8% annual coupon interest

ABC Company's bonds pay 8% annual coupon interest and are selling at 105 percent of par. The yield to maturity

		is less than 8%
		is equal to 8%
		is greater than 8%

Project A requires an initial investment of $9,000 at t = 0. Project A has an expected life of 2 years with after-tax cash inflows of $6,000 and $8,500 at the end of Years 1 and 2, respectively. The project has a required return of 11%. What is the equivalent annual annuity?

ABC Company has 6 percent bonds outstanding that mature in 13 years. The bonds can be called in 3 years at a call price of $1150. The bonds pay interest semiannually and have a face value of $1,000. Currently, the bonds are selling for $993 each. What is the yield to call (YTC)?

ABC Company offers a 5% coupon bond with a current market price of $850.25. The yield to maturity is 7.34%. The face value is $1,000. Interest is paid semiannually. What is the number of years until the bond matures?

A project requires $15,200 of equipment that is classified as a 7-year property. What is the depreciation expense in Year 2 given the following MACRS depreciation allowances, starting with year one: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4.46 percent?

ABC Company has $1,000 face value bonds outstanding. These bonds pay interest semiannually, mature in 9 years, and have a 6.5 percent coupon.The current price of the bond is $1100. What is the yield to maturity?

Suppose the nominal rate is 20.21% and the inflation rate is 4.68%. Solve for the real rate. Use the Fisher Effect formula.

What is the project's initial investment outlay based on the following information: The machinery could be purchased for $27,378. Shipping and installation costs would cost another $3,982. The project would require an initial investment in net working capital of $7,157. The company's tax rate is 30%.

ABC Company purchased a new machinery 4 years ago for $64,613. Today, it is selling this equipment for $13,284. What is the after-tax salvage value if the tax rate is 24 percent?

The MACRS allowance percentages are as follows, commencing with year one: 20.00, 32.00, 19.20, 11.52, 11.52, and 5.76 percent.

You have a $65,037 portfolio that consists of $16,616 invested in Stock A, $18,213 invested in Stock B, $6,023 invested in Stock C, and the remainder in Stock D. The portfolio has a return of 23.6 percent. The return for Stock A is 16.4 percent, for Stock B is 32.5 percent, and for Stock C is 4.4 percent. What is the return for Stock D?

Five years ago, ABC Company invested $49,719 million in a machinery. The investment in net working capital was $4,021 which would be recovered at the end of the project. Today, ABC Company is selling the machinery for $18,138 million. The book value of the machinery is $20,646 million. The tax rate is 23 percent. What are the terminal cash flows in Year 5?

A 12-year project is expected to generate annual sales of $268,707, variable costs of $40,925, and fixed costs of $39,845. The annual depreciation is $12,041 and the tax rate is 36 percent. What is the annual operating cash flow?

A project has an initial requirement of $80,763 for equipment.The equipment will be depreciated to a zero book value over the 5-year life of the project.The investment in net working capital will be $22,160.All of the net working capital will be recouped at the end of the 5 years.The equipment will have an estimated salvage value of $13,921. The annual operating cash flow is $38,463. The cost of capital is 14 percent. What is the project’s net present value if the tax rate is 29 percent?

You have invested $65,588 portfolio in three securities. The three securities comprise of the risk-free asset, Stock A, and Stock B. The beta of stock A is 2.2 while the beta of stock B is 0.5. 17% of the portfolio is invested in the risk-free security. What is the dollar amount invested in stock B if the beta of the portfolio is 1.3?

ABC Company is considering a new project. The project is expected to generate annual sales of $65,476, variable costs of $18,689, and fixed costs of $9,650. The depreciation expense each year is $10,884 and the tax rate is 25 percent. What is the annual operating cash flow?

ABC Company is considering an investment that will cost the company $486 at time=0. The after-tax cash flows are expected to be $89 each year for 13 years. What is the payback period?

The risk-free rate is 6.3%, the market risk premium is 11.2%, and the stock’s beta is 0.88. What is the required rate of return on the stock, E(Ri)?

Based on the following information, what is the portfolio beta?

Stock	Value	Beta
A	$47,570	1.14
B	$25,106	1.88
C	$30,608	0.72
D	$30,787	3.38

ABC Inc. is considering an investment of $1,763 million with after-tax cash inflows of $422 million per year for six years and an additional after-tax salvage value of 71 million in Year 6. The required rate of return is 15%. What is the investment’s Profitability Index (PI)?

One year ago, you puchased 207 shares of ABC stock for $51.7 per share. During the year, you received a dividend of $6.83 per share. Today, you sold all your shares for $60.64. What are the percentage return on your investment?