The following questions are short answer.  Please do not write more than a few sentences for any one question, and feel free to use bullet points when possible.

You are considering the purchase of a semi-annual bond, with 7 years remaining until maturity.  It has a $1,000 face value, with a coupon rate of 6%, and currently sells for $894.37 in the market.  Given this information, what is the annual interest rate on this bond?

What is the operating cash flow each year?

The market value of Charcoal Corporation’s common stock is $20 million, and the market value of its debt is $5 million. The yield to maturity is 7%.  The beta of the company’s common stock is 1.25, and the market risk premium is 8%.  If the T-bill rate is 5%, what is the company’s weighted average cost of capital? (Assume no taxes.)

Assume that you read that Textron was sued yesterday by government regulators for manipulating prices.  Under what form of market efficiency would you be able to profit off of this information?

What is the recovery amount attributable to net working capital at the end of the project? 

Which of the following is not a factor in determining the required return on a bond?

What is the annual Depreciation?

Mike Whizowski Motors issued one million shares of preferred stock that pays a dividend of $2.00 per year.  If the required rate of return on their stock is 10%, how much money were they able to raise?

Assume an NPV of -$60,000.  What is the EAC?