• QUESTION 25 – A firms bonds have a maturity of 15 years with a $1,000 face value, have an 6% semiannual coupon, are callable in 5 years at $1,030 and currently sell at a price of $1,075. What is the yield to call on this bond? What is the yield to maturity?
a. 6, 5
b. 4.83, 7.27
c. 5.27, 6
d. 4.83, 6

• QUESTION 23 - Calculate the intrinsic value of a stock with the following data. Dividend $1.50 annually, required return of 8%, and a forecast growth rate of 6% for the next few years.

a. 18.75
b. 75
c. 25
d. Unable to determine with data

• QUESTION 22 – Calculate the portfolio beta for the following portfolio. Market Value of $55,000 in stock A with a beta of .9 and stock b with a market value of $65,000 and a beta of 1.2
a. 1.05
b. 2.1
c. Unable to determine with data
d. 1.06

• QUESTION 21– The future earnings, dividends, and common stock price of Miami Tech are expected to grow 6% per year and its required return is 10%. Miami Techs common stock currently sells for $25 per share, its last dividend was $2.50, and it will pay a $2.75 dividend at the end of the current year.

What is the current intrinsic value based on the DDM model? What is the current dividend yield? Is the stock a buy?

a. 41.66, 6%, yes
b. 25, 10%, no
c. 62.50, 10% , yes
d. None of the above

• QUESTION 20 – If a company has a sales in a foreign country and would like to hedge exchange rate risk as it brings the sales proceeds back to the home country, what tools can the company utilize to manage this risk?

a. Spot contract
b. Currency futures
c. Forward contracts
d. B & C

• QUESTION 18 - Panther Corp. recently paid out dividend of $2. It expects to have nonconstant growth of 20% for two years followed by a constant rate of growth of 6% thereafter. The firms required return is 12%.

What is the firms intrinsic value today?

a. 50.83
b. 56.11
c. 40.67
d. 45.11
• QUESTION 16 – Company ITech has FCF of 125m$ per year, has a WACC of 12%, long term growth rate of 8%, 10m shares outstanding and 100m$ in debt outstanding. What is the value of each share of stock?

a) 312.50
b) 156.25
c) 302.50
d) 146.25
e) 104.17

• QUESTION 17 – The new soccer stadium costs $50 ($ in millions), is expected cash flows are $14 per year for 10 years, and its WACC is 12%. What is the stadiums NPV? What is the IRR? What is the discounted payback?
a. 90m, 180%, 3.6 years
b. 29.1m, 25%, 4.94 years
c. 36m, 30%, 6 years
d. 27m, 22%, 8 years

• QUESTION 10 – What is the value of the following stock using the following information. The dividend is $2, the risk free rate is 5% and the risk premium is 5% while the beta on the stock is 1.5 and the long term growth is 6%.

a) $40
b) $33.33
c) $32.61
d) $16.67
e) $20
• QUESTION 9 – What is the price of the following BBB rated bond. The coupon is 5.5%, it is noncallable, pays semi annually, is a 7 year maturity and is at YTM of 7%

a) $1,000
b) $945
c) $930
d) $918
e) $1,055

• QUESTION 7 – Using the info from question 14, calculate the WACC assuming a cost of debt of 10%, tax rate of 35%, and a cost of equity of 14%:

a) 24%
b) 10.25%
c) 12%
d) 17.5%
e) Unable to determine

• QUESTION 25 – A firms bonds have a maturity of 15 years with a $1...