10) Christopher has three options for settling an insurance claim. The applicable discount rate is 6.8...

10) Christopher has three options for settling an insurance claim. The applicable discount rate is 6.8 percent, compounded monthly. Determine the value of each option: (USE Excel)

Option A will provide $1,500 a month for 6 years -

Option B will pay $1,025 a month for 10 years -

Option C offers $85,000 as a lump sum payment today –

Which option should Christopher select, and why, if he is only concerned with the financial aspects of the offers?

11) Lehman Properties offers bonds with a coupon rate of 8.8 percent paid semiannually. The yield to maturity is 11.2 percent and the maturity date is 11 years from today. What is the market price of this bond if the face value is $100,000? (Use Excel)

12) Murphy Companies preferred stock pays a constant $5.75 dividend every year. What is the required return if the stock price is $54.09 per share?

Would you buy this stock if your current portfolio average return is 12%? Explain

Expert Solution

The calculation for each one is shown below

Following shows the working

jeff jeffy answered 1 year ago

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