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 Copyright © 2017 by University of Phoenix. All rights reserved. University of Phoenix® is a registered trademark of Apollo Group, Inc. in the United States and/or other countries. Microsoft®, Windows®, and Windows NT® are registered trademarks of Microsoft Corporation in the United States and/or other countries. All other company and product names are trademarks or registered trademarks of their respective companies. Use of these marks is not intended to imply endorsement, sponsorship, or affiliation. 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