A T-bond with semi-annual coupons has a coupon rate of 7%, face value of $1,000, and 2 years to maturity. If its yield to maturity is 5%, what is its Macaulay Duration? Answer in years, rounded to three decimal places.

Bond J has a coupon rate of 4 percent. Bond K has a coupon rate of 9 percent. Both bonds have 7 years to maturity, make semiannual payments, and have a YTM of 6 percent.

-If interest rates suddenly rise by 2 percent, what is the percentage price change of Bond J?

-If interest rates suddenly rise by 2 percent, what is the percentage price change of Bond K?

-If interest rates suddenly fall by 2 percent, what is the percentage price change of Bond J?

-If interest rates suddenly fall by 2 percent, what is the percentage price change of Bond K?

You must evaluate a proposal to buy a new milling machine. The base price is $192,000, and shipping and installation costs would add another $16,000. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $134,400. The applicable depreciation rates are 33%, 45%, 15%, and 7%. The machine would require a $8,500 increase in net operating working capital (increased inventory less increased accounts payable). There would be no effect on revenues, but pretax labor costs would decline by $46,000 per year. The marginal tax rate is 35%, and the WACC is 13%. Also, the firm spent $5,000 last year investigating the feasibility of using the machine.

1. How should the $5,000 spent last year be handled?
   1. Last year's expenditure is considered as a sunk cost and does not represent an incremental cash flow. Hence, it should not be included in the analysis.
   2. The cost of research is an incremental cash flow and should be included in the analysis.
   3. Only the tax effect of the research expenses should be included in the analysis.
   4. Last year's expenditure should be treated as a terminal cash flow and dealt with at the end of the project's life. Hence, it should not be included in the initial investment outlay.
   5. Last year's expenditure is considered as an opportunity cost and does not represent an incremental cash flow. Hence, it should not be included in the analysis

2. What is the initial investment outlay for the machine for capital budgeting purposes, that is, what is the Year 0 project cash flow? Round your answer to the nearest cent.
   $

3. What are the project's annual cash flows during Years 1, 2, and 3? Round your answer to the nearest cent. Do not round your intermediate calculations.

   Year 1 $

   Year 2 $

   Year 3 $

4. Should the machine be purchased

Share the most popular issue/topic on stock market. This could be a short article or a video (no longer than 5 minutes). Please either attach the article or share the link. Write down a brief introduction about the sharing. no write by hand，please typing, have a good one!

You must evaluate the purchase of a proposed spectrometer for the R&D department. The base price is $170,000, and it would cost another $25,500 to modify the equipment for special use by the firm. The equipment falls into the MACRS 3-year class and would be sold after 3 years for $76,500. The applicable depreciation rates are 33%, 45%, 15%, and 7%. The equipment would require a $9,000 increase in net operating working capital (spare parts inventory). The project would have no effect on revenues, but it should save the firm $42,000 per year in before-tax labor costs. The firm's marginal federal-plus-state tax rate is 40%.

1. What is the initial investment outlay for the spectrometer, that is, what is the Year 0 project cash flow? Round your answer to the nearest cent. Negative amount should be indicated by a minus sign.
   $

2. What are the project's annual cash flows in Years 1, 2, and 3? Round your answers to the nearest cent.

   In Year 1 $

   In Year 2 $

   In Year 3 $

3. If the WACC is 10%, should the spectrometer be purchased?

You must evaluate a proposal to buy a new milling machine. The base price is $172,000, and shipping and installation costs would add another $7,000. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $60,200. The applicable depreciation rates are 33%, 45%, 15%, and 7%. The machine would require a $10,000 increase in net operating working capital (increased inventory less increased accounts payable). There would be no effect on revenues, but pretax labor costs would decline by $32,000 per year. The marginal tax rate is 35%, and the WACC is 14%. Also, the firm spent $5,000 last year investigating the feasibility of using the machine.

1. How should the $5,000 spent last year be handled?
   1. Last year's expenditure should be treated as a terminal cash flow and dealt with at the end of the project's life. Hence, it should not be included in the initial investment outlay.
   2. Last year's expenditure is considered as an opportunity cost and does not represent an incremental cash flow. Hence, it should not be included in the analysis.
   3. Last year's expenditure is considered as a sunk cost and does not represent an incremental cash flow. Hence, it should not be included in the analysis.
   4. The cost of research is an incremental cash flow and should be included in the analysis.
   5. Only the tax effect of the research expenses should be included in the analysis.
   
   -Select-IIIIIIIVVItem 1

2. What is the initial investment outlay for the machine for capital budgeting purposes, that is, what is the Year 0 project cash flow? Round your answer to the nearest cent.
   $

3. What are the project's annual cash flows during Years 1, 2, and 3? Round your answer to the nearest cent. Do not round your intermediate calculations.

   Year 1 $

   Year 2 $

   Year 3 $

4. Should the machine be purchased?
   -Select-YesNo

 You have been given the expected return data shown in the first table on three assets—​F, G, and H —over the period​ 2016-2019:

Using these​ assets, you have isolated the three investment alternatives shown in the following​ table:

Alternative Investment

1 100% of asset F

2 ​50% of asset F and​ 50% of asset G

3    ​50% of asset F and​ 50% of asset H

a.  Calculate the average return over the​ 4-year period for each of the three alternatives.

b.  Calculate the standard deviation of returns over the​ 4-year period for each of the three alternatives.

c.  Use your findings in parts a and b to calculate the coefficient of variation for each of the three alternatives.

d.  On the basis of your​ findings, which of the three investment alternatives do you think performed better over this​ period? ​ Why?

3- CD is an all equity firm that has 10,000 shares of stock outstanding at a market price of $20 a share. The firm's management has decided to issue $50,000 worth of debt and use the funds to repurchase shares of the outstanding stock. The interest rate on the debt will be 5 percent.

a. What are the earnings per share at the break-even level of earnings before interest and taxes? Ignore taxes.

Draw a graph with EPS on the vertical axis and EBIT on the horizontal axis for the all equity company and the company with leverage. Show on the graph the break-even level of earnings for the two financing alternatives.

1. The primary objective of venture capital is to make big profits by investing in risky start-ups.

Group of answer choices

True

False

2. Investment bank usually sets the IPO price at the fair value.

Group of answer choices

True

False

ICU Window, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 8 years to maturity that is quoted at 106.5 percent of face value. The issue makes semiannual payments and has an embedded cost of 6.4 percent annually. a. What is the company’s pretax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. If the tax rate is 23 percent, what is the aftertax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Tailoka is a large company with gearing debt to equity ratio by market values of 1:2.The
company’s profit after tax in the most recent year were K2,700,000 of which K1,070,000
was distributed as ordinary dividends. The Company has 5 million issued ordinary
shares which are currently trading on the LUSE at K3.21.Corporate tax rate is 35% and
corporate debt is risk free.Tailoka would want to undertake a new capital project. The
project is a major diversification into a new industry. You have been tasked to provide
estimates of the discount rate to be used in evaluating this new investment.
You have been given the following information showing estimates for the next five years.
Growth rate of own company earnings12%Average Equity Beta coefficient1.5Average industry gearing (debt to equity) ratio1:3 by market valueAverage payout ratio55%Stock market total return on equity16%Growth rate of own company dividends11%Growth rate of own company sales13%Treasury bills12%Own company dividend yield7%Own company geared equity beta1.4Own company share price rise14%

Required
(a) Calculate the company’s weighted Average Cost of Capital (WACC) using the
Capital Asset Pricing Model (CAPM).
(b) Calculate the company’s weighted Average Cost of Capital (WACC) using the
dividend valuation model
(c) Describe the situations under which the above two models will produce same
values for WACC
(d) Discuss any five (5) practical problems of using CAPM in investment
appraisal.|
(e) Prepare a brief report recommending which discount rate you should use for this
investment.Information from pars (a),(b) and (c ) above may be useful.

Bond X is noncallable and has 20 years to maturity, an 8% annual coupon, and a $1,000 par value. Your required return on Bond X is 7%; if you buy it, you plan to hold it for 5 years. You (and the market) have expectations that in 5 years, the yield to maturity on a 15-year bond with similar risk will be 7.5%. How much should you be willing to pay for Bond X today? (Hint: You will need to know how much the bond will be worth at the end of 5 years.) Do not round intermediate calculations. Round your answer to the nearest cent.

5. Midwest Packaging's ROE last year was only 5%; but its management has developed a new op-erating plan that calls for a debt-to-assets ratio of 60%, which will result in annual interest charges of $120,000. The firm has no plans to use preferred stock. Management projects an EBIT of $332,000 on sales of $4,000,000, and it expects to have a total assets turnover ratio of 2.1. Under these conditions, the tax rate will be 40%. If the changes are made, what will be the company's return on equity? Round your answer to two decimal places. %

6. Fontaine Inc. recently reported net income of $7 million. It has 560,000 shares of common stock, which currently trades at $25 a share. Fontaine continues to expand and anticipates that 1 year from now, its net income will be $11.9 million. Over the next year it also anticipates issuing an additional 84,000 shares of stock so that 1 year from now it will have 644,000 shares of common stock. Assuming Fontaine's price/earnings ratio remains at its current level, what will be its stock price 1 year from now? Round your answer to the nearest cent. $

A 9.17% semiannual-pay corporate bond matures 15 August 2028 and makes coupon payments on 15 February and 15 August. The bond uses the 30/360 day-count convention for accrued interest. The bond is priced for sale on June 5, 2020 (that is, 110 days since the Feb. 15 coupon). What is its flat price (or clean price) per $ 100 of par value on June 5, 2020 if its yield to maturity is 4.6%? Carry intermediate calcs. to four decimals. Answer to two decimals. Assume 1,000 par value and semi annual compounding