A bond offers a coupon rate of [c]%, paid annually, and has a maturity of [a] years. The current market yield is [y]%. Face value is $1,000. If market conditions remain unchanged, what should the price of the bond be in 1 year? Assume the market yield remains unchanged. Enter your answer in terms of dollars and cents, rounded to 2 decimals, and without the dollar sign. That means, for example, that if your answer is $127.5678, you must enter 127.57

You’ve just been awarded a disability pension that will pay you $[a] annually forever. If the discount rate is [i]%, what is the present value of this pension? Enter your answer in dollars, rounded to the nearest cent. So, for example, if your answer is 1234.5678, then enter 1234.57

A company has $50 million in common stock, $10 million in preferred stock, and $20 million in outstanding bonds. What is the percentage of debt in this firm’s capital structure? Enter your answer as a percentage, without the percentage sign (‘%’), rounded to 1 decimal. For example, if your answer is 0.0789, that’s 7.9%, so just enter 7.9

Assume a project has a positive NPV, and that its IRR is unique (there is no problem with multiple IRRs). In this case, which one is expected to be higher, the IRR or the MIRR?

Assume you have just obtained the semiannual YTM for a bond that pays semiannual coupons. How do you state this YTM on an annual basis?

A company has just paid a dividend of [d]$. Its discount rate is [r]%, and the expected perpetual growth rate is [g]%. What would you expect to be the stock’s price TODAY? Express your answer in dollars, rounded to the nearest cent (2 decimals).

Assume a share of preferred stock offers an annual dividend of $2.50, and is currently selling for $57. What is this firm’s cost of preferred stock? Enter your answer as a percentage, without the percentage sign (‘%’), rounded to 2 decimals. For example, if your answer is 0.07789, that’s 7.79%, so just enter 7.79

You were hired as a consultant to Giambono Company, whose target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is 6.00%, the cost of preferred is 7.50%, and the cost of retained earnings is 12.75%. The firm will not be issuing any new stock. What is its WACC?

From a WACC calculation prepared for you by a consultant, you find that their estimation of the after tax cost of debt is 6%. Given a tax rate of 40% and a WACC of 15%, what must have been the cost of debt before adjusting for taxes?  

Which assumption is central to the calculation of the payback measure?