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1.?You intend to buy a new car when you graduate from FSB. ?You know you can only afford a monthly payment of \$412/month. ?You want to know how much car you can afford, so you go to your bank and are told the nominal rate of interest on a new car loan is 8.76%, with a 6-year loan, no down payment. ?How much car can you afford? ?(Make your answer a positive number, no commas, no decimals.. Example ? 2500, not 2,500,).
1. You intend to buy a new car when you graduate from FSB. You know you can only afford a monthly payment of \$412/month. You want to know how much car you can afford, so you go to your

bank and are told the nominal rate of interest on a new car loan is 8.76%, with a 6?year loan, no down payment. How much car can you afford? (Make your answer a positive number, no commas, no decimals.. Example 2500, not 2,500,).

2. You have a 20 year annuity, depositing \$500 per year, earning 6.1%, compounded annually. However, at the end of 20 years you have accumulated \$17,000. Concerned, you ask your accountant and she informs you that the amount deposited each year was changed after the 13th period. What was the new deposit amount for the last 7 years? Make your answer positive, 2 decimal places.

3. You have the following bond: \$1000 Par Value, 21 year maturity, Coupon = 9.1%, semi?annually compounded, Mkt rate of 11.25%. You pay \$810 for the bond today. What is the NPV of this financial instrument? Make your answer positive, 2 decimal places.

4. Mary's grandmother wants to buy an annuity from Met Life that pays her \$1300/month for 10 years. She and Met Life agree on an nominal interest rate of 4.1%. She wants \$15,000 left at the end of the 10 years to leave to Mary. What should the annuity cost today? Make your answer positive, with no commas. 5. Arnold buys a perpetuity for his daughter that pays \$1311/year and costs him \$14,713.80. What is the market rate of interest associated with this perpetuity? Make your answer positive as a whole number with 2 decimal places. Example: 5.10% = 5.10, not .0510)

6. Harry has the following constant growth stock: D0 = 1.90, constant g = 8% and ks = 12%. What is P48? Make the answer positive, no commas, 2 decimal places.

7. Marti deposits \$2100 today into an account earning 7.5%, compounded quarterly. How much money is in the account in 24 years? Positive number, no commas, 2 decimal places.

8. Kathy wants to have \$14,292.76 saved in four years, when she graduates college. Assuming she

will earn 4.1%, compounded semi?annually, how much does she need to deposit into an account today? Positive number, no commas, 2 decimal places. 9.

You have the following nonconstant growth stock, What is the amount of the missing dividend in period 3? Growth goes constant in period 5 at 7%. Required return is 11%. P0 = \$105.98. 0

|--0.950 1

----1.150 2

- - - -| - 1.276 3 4 5 ----- - - - -| - ----- 5.271 5.640 10.

You have the following information. Company David's one bond issue has an after?tax yield of 3.73%. Common stock is sold on the market for \$78.00/share, D0 = \$2.00, constant growth rate of 6%, and flotation costs of \$4.00/share. Target capital structure is 40% debt, 60% equity. If the firm's

WACC is 6.811%, is all the equity common stock, or all retained earnings?

Common Stock

Retained Earnings

No answer text provided. - - - -| -

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