1. B Corporation has $1000 par value bonds with 7 years left to maturity, a stated annual coupon rate of 4.5 percent (with annual interest payments).
What are these bonds worth today if the required market rate of return is 6 percent?

2. D Corporation has three bonds outstanding. All three have a coupon rate of 7 percent and a $1000 par value. The first bond has one year left to maturity. The second bond has 4 years left to maturity. The last bond has 8 years left to maturity. Assume for simplicity that the market rate for all three bonds is now 4 percent.
What is the value for the first bond with one year left to maturity?

3. F Corporation has a policy to grow the company's cash flows and consequently the dividend by 3 percent each year. In addition, F Corp is in an industry where risk is relatively low. Because of this low risk, a 9 percent return is reasonable as a required return. Assuming that F Corp will live up to these projections forever and expects to pay a $1.04 dividend per share at the end of the coming year. Using the formula in the book, a ballpark estimate of the value of this common stock is _________

4. H Corporation is considering a training program that cost $600,000. Anticipated benefits are $60,000 in the first year, $75,000 in the second year, $85,000 in the third year, and $95,000 in the fourth year. Benefits will decline 8 percent a year after the fourth year, and will end after the twelfth year. Assume these benefits are received at year-end. The effective required return is 6 percent. The net present value of this training project and is ______________.

5. A new factory at Arcata requires an initial outlay of $3.5 million to be paid immediately. The factory will last for eight additional years, after which it can be sold for a salvage value of $2,000,000. Sales will be $800,000 during the first year of operation and will grow at a rate of 9 percent a year after that. Variable costs will be 30 percent of sales and fixed costs will be $150,000 and grow at a rate of 5% per year. All costs are in cash. Assume cash flows occur at year

1. B Corporation has $1000 par value bonds with 7 years left to ma...