[u02a1] Unit 02 Assignment 1

Unit 2 Textbook Problems

Activity Context

Dear writer this assignment will help you develop the skills to master the following course competencies:

• Apply the theories, models, and practices of finance to the financial management of the firm.

Activity Instruction

Writer to enhance your understanding of financial concepts, please complete the following problems in your Corporate Finance textbook.

• Chapter 4, problem 2a, b, and c (pages 117).

• Chapter 4, problem 3 (page 118).

• Chapter 4, problem 4 (page 118).

• Chapter 4, problem 5 (page 118).

• Chapter 4, problem 11 (page 119).

• Chapter 5, problem 2a (page 158).

• Chapter 5, problem 3 (page 158).

• Chapter 6, problem 2 (page 190).

• Chapter 6, problem 4 (page 190).

Writer you are required to use the textbook problems template in the Resources to complete the problems. This Excel document contains unique details and cells specific to the problems that you must use to derive your solutions. Provide full detail of the process used to reach the solution.

Submit your completed problems for grading and instructor feedback. Solutions for the problems will be posted the subsequent week.

Resources

• Unit 2 Textbook Problems Scoring Guide.

• Textbook Problems Unit 2.

CH 4 Pg 117 Basic 2a. ab & c

(Questions 1–20)

2. Calculating Future Values Compute the future value of $3,200 compounded annually for

a. 10 years at 6 percent

b. 10 years at 8 percent

c. 20 years at 6 percent

Chapter 4, problem 3 (page 118)

3. Calculating Present Values For each of the following, compute the present value:

Chapter 4, problem 4 (page 118).

4. Calculating Interest Rates Solve for the unknown interest rate in each of the following:

Chapter 4, problem 5 (page 118).

5. Calculating the Number of Periods Solve for the unknown number of years in each of the following:

Chapter 4, problem 11 (page 119).

11. Present Value and Multiple Cash Flows Conoly Co. has identified an investment project with the following cash flows. If the discount rate is 5 percent, what is the present value of these cash flows? What is the present value at 13 percent? At 18 percent?

Chapter 5, problem 2a (page 158).

2. Valuing Bonds Microhard has issued a bond with the following characteristics:

Par: $1,000

Time to maturity: 25 years

Coupon rate: 7 percent

Semiannual payments

Calculate the price of this bond if the YTM is:

a. 7 percent

b. 9 percent

c. 5 percent

Chapter 5, problem 3 (page 158).

3. Bond Yields Watters Umbrella Corp. issued 15-year bonds two years ago at a coupon rate of 6.8 percent. The bonds make semiannual payments. If these bonds currently sell for 105 percent of par value, what is the YTM?

Chapter 6, problem 2 (page 190)

2. Stock Values The next dividend payment by ZyX, Inc., will be $1.99 per share. The dividends are anticipated to maintain a growth rate of 4.5 percent forever. If ZyX stock currently sells for $31 per share, what is the required return?

Chapter 6, problem 4 (page 190).

4. Stock Values Mickelson Corporation will pay a $2.65 per share dividend next year. The company pledges to increase its dividend by 4.75 percent per year indefinitely. If you require a return of 11 percent on your investment, how much will you pay for the company’s stock today?

**P(5.u)**

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