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CHAPTER 6
2. Present Value and Multiple Cash Flows [LO1] Investment X offers to pay you $4,700 per year for
eight years, whereas Investment Y offers to pay you $6,700 per year for five years. Which of these
cash flow streams has the higher present value if the discount rate is 5 percent? If the discount rate
is 15 percent?
20. Calculating Loan Payments [LO2, 4] You want to buy a new sports coupe for $79,500, and the
finance office at the dealership has quoted you an APR of 5.8 percent for a 60-month loan to buy
the car. What will your monthly payments be? What is the effective annual rate on this loan?
CHAPTER 7
3. Valuing Bonds [LO2] Even though most corporate bonds in the United States make coupon
payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a
German company issues a bond with a par value of €1,000, 23 years to maturity, and a coupon rate
of 5.8 percent paid annually. If the yield to maturity is 4.7 percent, what is the current price of the
bond?
11. Valuing Bonds [LO2] Union Local School District has a bond outstanding with a coupon rate of
3.7 percent paid semiannually and 16 years to maturity. The yield to maturity on this bond is 3.9
percent, and the bond has a par value of $5,000. What is the price of the bond?
CHAPTER 8
1. Stock Values [LO1] The Jackson–Timberlake Wardrobe Co. just paid a dividend of $1.95 per
share on its stock. The dividends are expected to grow at a constant rate of 4 percent per
year indefinitely. If investors require a return of 10.5 percent on The Jackson–Timberlake
Wardrobe Co. stock, what is the current price? What will the price be in three years? In 15
years?
6. Stock Valuation [LO1] Suppose you know that a company’s stock currently sells for $63 per
share and the required return on the stock is 10.5 percent. You also know that the total return on
the stock is evenly divided between a capital gains yield and a dividend yield. If it’s the company’s
policy to always maintain a constant growth rate in its dividends, what is the current dividend per
share?
Chapter 5
Problems 1, 2, 3, 4, 5
Input boxes in tan
Output boxes in yellow
Given data in blue
Calculations in red
Answers in green
NOTE: Some functions used in these spreadsheets may require that
the "Analysis ToolPak" or "Solver Add-In" be installed in Excel.
To install these, click on the Office button
then "Excel Options," "Add-Ins" and select
"Go." Check "Analyis ToolPak" and
"Solver Add-In," then click "OK."
Chapter 5
Question 3
Output area:
$
$
$
$
Present value
-
Input area:
Years
Interest rate
Future value
Chapter 5
Question 4
Input area:
Present value
Output area:
Years
Interest rate
#NUM!
#NUM!
#NUM!
#NUM!
Future value
Chapter 8
Problems 4, 6, 7, 32
Input boxes in tan
Output boxes in yellow
Given data in blue
Calculations in red
Answers in green
NOTE: Some functions used in these spreadsheets may require that
the "Analysis ToolPak" or "Solver Add-In" be installed in Excel.
To install these, click on the Office button
then "Excel Options," "Add-Ins" and select
"Go." Check "Analyis ToolPak" and
"Solver Add-In," then click "OK."
Chapter 8
Question 6
Input area:
Stock price
Required return
Output area:
Next year's dividend
$
-
Current dividend
$
-
Question and Problem Sets Grading
Guide
FIN/370 Version 11
Finance for Business
Copyright
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Edited in accordance with University of Phoenix® editorial standards and practices.
Question and Problem Sets
Grading Guide
FIN/370 Version 11
Individual Assignment: Question and Problem Sets
Purpose of Assignment
Students should be able to calculate time value of money problems including solving for; present value, future
value, rate and payment, determine the value and yield of corporate bonds and use the dividend discount
model to calculate the value and expected return of a common stock.
Resources Required
Tutorial help on Excel® and Word functions can be found on the Microsoft® Office website. There are also
additional tutorials via the web that offer support for office products.
Fundamentals of Corporate Finance: Ch. 5, 6, 7 and 8
Grading Guide
Content
Met
Partially
Met
Not Met
Total
Available
Total
Earned
6
#/6
Complete the following:
• Chapter 5
o Questions 3 & 4 (Question and
Problems section): Microsoft® Excel®
templates provided for Problems 3
and 4.
• Chapter 6
o Questions 2 & 20 (Questions and
Problems section)
• Chapter 7
o Questions 3 &11 (Questions and
Problems section)
• Chapter
o Questions 1 & 6 (Questions and
Problems section): Microsoft® Excel®
template provided for Problem 6.
Shows all work and analysis for each
question.
Prepare the exercises and problems in a
Microsoft® Word document or Excel®
Spreadsheet.
Comments:
2
Question and Problem Sets
Grading Guide
FIN/370 Version 11
Writing Guidelines
Met
Partially
Met
Not Met
Total
Available
Total
Earned
2
#/2
8
#/8
The paper—including tables and graphs,
headings, title page, and reference page—is
consistent with APA formatting guidelines and
meets course-level requirements.
Intellectual property is recognized with in-text
citations and a reference page.
Paragraph and sentence transitions are
present, logical, and maintain the flow
throughout the paper.
Sentences are complete, clear, and concise.
Rules of grammar and usage are followed
including spelling and punctuation.
Assignment Total
Additional comments:
#
Comments:
3