1)  Valuation - preferred stock What is the value of a share of preferred stock that pays a $4.50 dividend, assume k is 10%. 2)  A share of stock is currently selling for $31.80. If the anticipated constant growth rate for dividends is 6% and investors are seeking a 16% return, what is the dividend just paid? 3)  Charlie Company is expected to grow at an annual rate of 6% indefinitely. The return on similar stocks is currently 11%. Charlie's board of directors declared a dividend of $1.85 yesterday. What should a share of Charlie Company sell for? 4)  Valuation – zero-coupon bond A U.S. Government bond with a face amount of $10,000 with 13 years to maturity is yielding 5.5%. What is the current selling price? 5)  A $1000 par value convertible bond has a conversion price of $50. It is currently selling for $1,120 despite the fact that the bond’s coupon rate and the market rate are equal. The common stock obtained upon conversion is selling for $54 per share. What is the convertible bond’s conversion premium?

The Worksheet should include a tab for the Original Data, Test Data and the Chart. VARIANCE ANALYSIS Workbook Bonnell Manufacturing makes dashboards for cars. During June, 40,000 dashboards were manufactured with standard costs and actual costs for direct materials, direct labor, and factory overhead as follows:     Standard Costs  Actual Costs Direct materials  10,000 pounds@$9   10,600 pounds @ $10.50 Direct labor   20,000 hours@$13   20,600 hours @ $12.50 Factory overhead   Rates per direct labor hour, based on normal     capacity of 30,000 labor hours:     Variable cost $5.00    Variable cost $84,000 Fixed cost $3.75   Fixed cost $49,000 You have been asked to develop a worksheet that will calculate the quantity variance, price variance, total direct materials cost variance, time variance, rate variance, total direct labor cost variance, volume variance, controllable variance, and total factory overhead cost variance (file name VARIANCE). Use the information above as input for the Data Section of your worksheet. Review the Model-Building Problem Checklist to ensure that your worksheet is complete. MODEL-BUILDING PROBLEM CHECKLIST Before submitting any model-building solution to your instructor, review the following list to ensure that your worksheet is presented in a clear, concise manner. 1. Include the name of the company, the name of the statement or schedule presented, and the date (e.g. 2009, 4th Quarter, June). The date should be in an unprotected cell. 2. Use cell references in your formulas wherever possible. 3. Format all cells properly. Place dollar signs ($) at the top of all amount columns and below all subtotal rules. 4. Use zero decimal places whenever decimal accuracy is not required. Generally, if the problem statement does not include cents, your answer will not require cents. 5. Vary column widths to fit the data presented. 6. Place titles at the top of all data columns (one exception is on financial statements where the statement heading is sufficient). Titles should be centered or right justified in the columns. 7. Use Data Sections wherever appropriate. If a Data Section is used, it should be labeled as such. 8. Use file protection where appropriate on the worksheet. Unprotect the cells where changeable data or labels are to be entered. 9. Use upper- and lowercase letters as appropriate. Generally, uppercase letters are needed as the first letter in all headings and titles. 10. Use the =ROUND function to eliminate rounding discrepancies. 11. Include a chart graph Check figure: Factory overhead volume variance, $37,500 U. To test your model, use the following information for the manufacture of 60,000 dashboards during July:   Standard Costs   Actual Costs Direct materials  16,000 pounds @ $11  14,800 pounds @ $11.75 Direct labor   30,000 hours@ $15   28,400 hours@ $16.25 Factory overhead  Rates per direct labor     hour, based on normal capacity of 30,000 labor hours:   Variable cost $5.00  Variable cost $133,000     Fixed cost $3.75   Fixed cost $98,000 Check figure: Factory overhead volume variance, $0.

1.  Holding Period Return Based on the following information calculate the holding period return: P0 = $10.00 P1 = $12.00 D1 = $1.22 2.  Holding Period Return Based on the following information calculate the holding period return: P0 = $11.00 P1 = $11.40 D1 = $1.02 3.  Risk and Return, Coefficient of Variation Based on the following information, calculate the coefficient of variation and select the best investment based on the risk/reward relationship.   Std Dev.                                                     Exp. Return Company A  10.4                                                           15.2 Company B  14.6  22.9 4.  Sources of Risk & Diversification – convertible bond. Address each source of risk from the portfolio perspective and how diversification impacts them. Your response should be at least 250 words in length. You are required to use at least your textbook as source material for your response. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations. 5.  Measures of Risk. Address each source of risk that is measured and relate it to two models addressed in this unit. Your response should be at least 250 words in length. You are required to use at least your textbook as source material for your response. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations.