One year ago you bought a share of Bavarian Sausage stock for $46.50. During the year the stock paid a $2.75 dividend. You have decided to sell the stock exactly one year after the purchase (today).   If dividends are growing at 4% and the required rate of return is 9.42%, what is the percentage return of your stock investment?

On January 1 of Year 1, Kamili Company leased a truck for a 7-year period under a capital lease and agreed to pay an annual lease payment of $6,000 at the end of each year. The interest rate associated with this capital lease is 12% compounded annually. On December 31 of Year 1,the first $6,000 payment was made as scheduled. The entry to record the payment of the first $6,000 payment on December 31 of Year 1includes

. Ledger Properties has the following financial information:

What is the cash flow of the firm for the current year if the tax rate is 22 percent?

A) $1,885

B) $1,042

C) $2,297

D) $2,096

E) $2,517

MC Qu. 111 On January 1 of Year...

On January 1 of Year 1, Congo Express Airways issued $2,700,000 of 6% bonds that pay interest semiannually on January 1 and July 1. The bond issue price is $2,450,000 and the market rate of interest for similar bonds is 7%. The bond premium or discount is being amortized at a rate of $8,333 every six months. After accruing interest at year end, the company's December 31, Year 1 balance sheet should reflect total liabilities associated with the bond issue in the amount of:

Multiple Choice:

$2,547,666.

$3,014,334.

$2,385,666.

$2,466,666.

$2,933,334.

MC Qu. 112 On January 1 of Year...

On January 1 of Year 1, Congo Express Airways issued $2,700,000 of 7% bonds that pay interest semiannually on January 1 and July 1. The bond issue price is $2,470,000 and the market rate of interest for similar bonds is 8%. The bond premium or discount is being amortized at a rate of $7,667 every six months. The amount of interest expense recognized by Congo Express Airways on the bond issue in Year 1 would be:

Multiple Choice:

$216,000.

$189,000.

$102,167.

$173,666.

$204,334.

Colton Enterprises experienced the following events for Year 1, the first year of operation: Acquired $45,000 cash from the issue of common stock. Paid $13,000 cash in advance for rent. The payment was for the period April 1, Year 1, to March 31, Year 2. Performed services for customers on account for $92,000. Incurred operating expenses on account of $40,000. Collected $70,500 cash from accounts receivable. Paid $31,000 cash for salary expense. Paid $32,000 cash as a partial payment on accounts payable. Adjusting Entries Made the adjusting entry for the expired rent. (See Event 2.) Recorded $4,400 of accrued salaries at the end of Year 1. Events for Year 2 Paid $4,400 cash for the salaries accrued at the end of the prior accounting period. Performed services for cash of $41,000. Purchased $3,800 of supplies on account. Paid $13,500 cash in advance for rent. The payment was for one year beginning April 1, Year 2. Performed services for customers on account for $108,000. Incurred operating expenses on account of $51,500. Collected $99,000 cash from accounts receivable. Paid $49,000 cash as a partial payment on accounts payable. Paid $32,500 cash for salary expense. Paid a $13,000 cash dividend to stockholders. Adjusting Entries Made the adjusting entry for the expired rent. (Hint: Part of the rent was paid in Year 1.) Recorded supplies expense. A physical count showed that $400 of supplies were still on hand.

b. Post the Year 1 events to T-accounts.

Toys Co. issued 10-year bonds a year ago at a coupon rate of 10%. The bonds make semiannual payments and have a par value of $1,000. If the YTM on these bonds is 9%, what is the current bond price?

Dexter Mills issued 20-year bonds a year ago at a coupon rate of 10.2 percent. The bonds make semiannual payments and have a par value of $1,000. If the YTM on these bonds is 9.2 percent, what is the current yield of the bond?

Question 33 options:

Suppose the yield curve shows 1 year rates at 5%, 2 year rates at 10% and 3 year rates at 15%. What is the price of a bond with a $1000 par value, maturity 3 years, and annual coupon payment of $50? Show work for credit.

1. A deposit of $4,375 earns 5.45 percent the first year, 5.86 percent the second year, 6.52 percent the third year, 7.08 percent in the fourth year and 7.54 percent in the fifth year. What is the amount of the fifth year future value?
A. less than $5,915
B. more than $5,915 but less than $5,950
C. more than $5,950 but less than $5,985
D. more than $5,985 but less than $6,020
E. more than $6,020

2. How much would be in your savings account in 18 years after depositing $1,475 today if the bank pays 5.76 percent interest per year and compounds annually?
A. less than $3,920
B. more than $3,920 but less than $3,955
C. more than $3,955 but less than $3,990
D. more than $3,990 but less than $4,025
E. more than $4,025

3. You can invest $7,500 for 12 years in an account that earns 5.76 percent per year or you can choose an account that has a delayed start for two years. That is, you wait two years and put $7,500 into an account that earns 6.84 percent per year. Assume that both accounts compound monthly. If you select the investment earning 5.76 percent, how much more interest will you earn than the account that pays 6.84 percent per year?
A. less than $115
B. more than $115 but less than $140
C. more than $140 but less than $175
D. more than $175 but less than $210
E. more than $210

4. Caroline wants to retire in 20 years and she has $167,895 in her retirement account today. Her Uncle James and Aunt Mary have established a trust fund for her that will pay $125,000 to her in 20 years. Caroline wants the sum of the trust and her retirement account to equal $725,000 upon retirement. If the accounts compound interest annually, what annual rate will Caroline need to earn on the retirement account to achieve this goal?
A. less than 6.00
B. more than 6.00 percent but less than 6.35 percent
C. more than 6.35 percent but less than 6.70 percent
D. more than 6.70 percent but less than 7.05 percent
E. more than 7.05 percent

The following transactions apply to Pecan Co. for Year 1, its first year of operations:

1. Received $38,000 cash in exchange for issuance of common stock.
2. Secured a $101,000 ten-year installment loan from State Bank. The interest rate is 6 percent and annual payments are $13,723.
3. Purchased land for $20,000.
4. Provided services for $115,000.
5. Paid other operating expenses of $39,000.
6. Paid the annual payment on the loan.

Required

1. Organize the transaction data in accounts under an accounting equation.
2. Prepare an income statement and balance sheet for Year 1.
3. What is the interest expense for Year 2? Year 3?

The following transactions apply to Pecan Co. for Year 1, its first year of operations:

1. Received $38,000 cash in exchange for issuance of common stock.
2. Secured a $101,000 ten-year installment loan from State Bank. The interest rate is 6 percent and annual payments are $13,723.
3. Purchased land for $20,000.
4. Provided services for $115,000.
5. Paid other operating expenses of $39,000.
6. Paid the annual payment on the loan.

Required

1. Organize the transaction data in accounts under an accounting equation.
2. Prepare an income statement and balance sheet for Year 1.
3. What is the interest expense for Year 2? Year 3?