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 ?
• Ch . 7 : Questions 3 & 11 ( Questions and Problems section ) 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 ? Excel Sheet
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 ?
• Ch . 8 : Questions 1 & 6 ( Questions and Problems section ): Microsoft ® Excel ® template provided for Problem 6
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 ?