A preferred stock that pays a constant dividend of $3.00 forever currently sells for $16.50. What is the required rate of return?

Etling Inc. is expected to pay a $2 dividend in one year and a $3 dividend in two years. The dividends are expected to grow at a 5% growth rate after that forever. If the required return is 14%, what is the price of the stock?

You presently own stock that you purchased one year ago. Your nominal return on the stock for the past year was 20%. You calculate your real return on investment was 11.50%. According to the “Fisher Effect” formula, the rate of inflation must have been _____.

A bond which only pays the coupon payment when the firm has sufficient income is called a(n) _________ bond.

The stand-alone principle states that a project’s analysis should be based solely on which one of the following costs?

Calculate the NPV of the following project cash flow using a discount rate of 5%: Yr 0 = –$1,000; Yr 1 = –$80; Yr 2 = +$100; Yr 3 = +$400; Yr 4 = +$500; Yr 5 = +$600

You presently own stock that you purchased one year ago. Your nominal return on the stock for the past year was 15%. You calculate your real return on investment as 11.50%. According to the “Fisher Effect” formula, the rate of inflation must have been _____.

Dizzy Corp. bonds bearing an annual coupon rate of 12%, pay coupons semi-annually, have 3 years remaining to maturity, a $1,000 face value, and are currently priced at $1,150 per bond. What is the yield to maturity as an annual stated rate (APR)?

A project costs $55,000, will be depreciated straight-line to zero over its 4 year life, and will require a net working capital investment of $5,000 up-front. The firm has a tax rate of 35% and a required return of 15%. The project generates an annual operating cash flow (OCF) of $22,000. What is the project’s NPV?

Supreme, Inc. has 6 percent coupon bonds on the market that have 12 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 7 percent, the current bond price is: