You are comparing two annuities that offer regular payments of $2,500 for five years and pay .75 percent interest per month. You will purchase one of these today with a single lump sum payment. Annuity A will pay you monthly, starting today, while Annuity B will pay monthly, starting one month from today. Which one of the following statements is correct concerning these two annuities?

You plan to save $5,000 per year for the next 8 years. After the last deposit, you will keep the money in the account for 5 more years. The account will earn an interest rate of 5.3 percent. How much will there be in the account 13 years from today?

Zheng Equipment has total assets with a current book value of $368,900 and a current replacement cost of $486,200. The market value of these assets is $464,800. What is the value of Tobin’s Q?

NU YU announced today that it will begin paying annual dividends. The first dividend will be paid next year in the amount of $.43 a share. The following dividends will be $.48, $.63, and $.93 a share annually for the following three years, respectively. After that, dividends are projected to increase by 3.1 percent per year. How much are you willing to pay today to buy one share of this stock if your desired rate of return is 12 percent?

Elevation Systems, Incorporated, expects its dividends to grow at 25 percent per year for the next seven years before levelling off to a constant 3 percent growth rate. The required return is 11 percent. What is the current stock price if the annual dividend per share that was just paid was $1.05?

The Red Bud Company pays a constant dividend of $1.60 a share. The company announced today that it will continue to do this for another 2 years after which time they will discontinue paying dividends permanently. What is one share of this stock worth today if the required rate of return is 7.2 percent?

We Pay Insurance Company will pay you $1,300 each quarter for 21 years. You want to earn a minimum interest rate of .93 percent per quarter. What is the most you are willing to pay today for these payments?

Bohensky’s has net income of $73,402, a price-earnings ratio of 13.7, and earnings per share of $.43. How many shares of stock are outstanding?

Bad Company, Incorporated, has a major outlay of $1.15 million that is needed to renovate the company’s manufacturing facility. Because the company’s management is conservative, it won’t undertake the renovation until it has the cash necessary to fund the renovation. The company plans to deposit $101,000 each quarter into an account that will earn 1.3 percent per quarter. How many years will it be until the company has the money saved for the renovation?

Weisbro and Sons common stock sells for $33 a share and pays an annual dividend that increases by 4.6 percent annually. The market rate of return on this stock is 10.3 percent. What is the amount of the last dividend paid by Weisbro and Sons?