1. A convertible bond has a 8% annual coupon and 15 years to maturity. The face value is $1,000 and the conversion ratio is 40. The stock currently sells for $20.875 per share. Similar nonconvertible bonds are priced to yield 9%. The value of the convertible bond is at least
2What is the net present value of a project that contributes $10,000 at the end of the first year and $5,000 at the end of the second year? The initial cost is $8,000 and the appropriate interest rate is 10% SOLUTION
3. If the stated rate of interest is 12% and it is compounded monthly, what is the effective annual interest rate?
4. Thorton will receive an inheritance of $500,000 three years from now. Thorton's discount rate is 10% interest rate compounded semiannually. Which of the following values is closest to the amount that Thorton should accept today for the right to his inheritance?
5 In 2004, TimeNow Corporation had current assets of $260 and current liabilities of $180. In 2003, current assets were $220 and current liabilities were $160. What was the change in net working capital for TimeNow in 2004?
6. You bought 100 shares of stock at $20 each. At the end of the year, you received a total of $400 in dividends, and your stock was worth $2,500 total. What was your total return?
7. What is the present value of 10 annual payments of $500 at a discount rate of 12%?
8. Union Company share are currently selling for $25 each. You bought 200 shares one year ago at $24 and received dividend payments of $1.50 per share. What was your total rate of return?
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