Southern Foods just paid an annual dividend of $1.10 a share. Management estimates the dividend will increase by 10 percent a year for the next 4 years. After that, the annual dividend growth rate is estimated at 3.2 percent. The required rate of return is 12 percent. What is the value of this stock today? exam spreadsheet (8).xlsx

Able, Baker, and Charlie are the only three stocks in an index. The stocks sell for $71, $312, and $86, respectively. If Baker undergoes a 3-for-2 stock split, what is the new divisor for the price-weighted index? Note: Do not round intermediate calculations. Round your answer to 5 decimal places. exam spreadsheet (8).xlsx

A financial instrument on which a futures contract is based is called which one of the following?

An investor who shifts risk is referred to as which one of the following?

Consider a bond with a coupon of 5.6 percent, ten years to maturity, and a current price of $1,057.70. Suppose the yield on the bond suddenly increases by 2 percent. Use duration to estimate the new price of the bond. (Do not round intermediate calculations. Round your answer to 2 decimal places. Do not include the $ sign) exam spreadsheet (8).xlsx

By how much did one September futures contract on corn vary during today’s trading? Contract Open High Low Close December, Corn. 5,000 bushels, cents per bushels 620.50 623.50 613.00 617.00 December, Wheat. 5,000 bushels, cents per bushels 804.00 810.00 798.00 801.00 exam spreadsheet (8).xlsx

The Clothing Company purchased six futures contracts on cotton at a quoted price of 60.70 as a hedge against its inventory needs. At the time it actually needed the cotton, the spot price was 61.50. Cotton futures are based on 50,000 pounds and quoted in cents per pound. How much did the Shirt Factory save by hedging cotton? exam spreadsheet (8).xlsx

A futures price is a price that is negotiated __________ and paid __________.

You purchased four September corn futures contracts at what turned out to be the lowest price of the day and sold those contracts at today’s close. What is your total profit or loss on this investment? Contract Open High Low Close September, Corn, 5,000 bushels, cents per bushels 615.50 618.25 608.00 613.50 September, Wheat, 5,000 bushels, cents per bushels 814.00 820.00 808.50 811.00 exam spreadsheet (8).xlsx

Rolling Company bonds have a coupon rate of 5.20 percent, 20 years to maturity, and a current price of $1,146. What is the YTM? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Do not include the % sign) exam spreadsheet (8).xlsx