27 . Consider the following financial statement information for the Rivers Corporation : Calculate the operating and cash cycles . ( Use 365 days a year . Do not round intermediate calculations and round your answers to 2 decimal places , e . g ., 32.16 .)
28 . The nominal rate of return on a bond is 7.28 percent while the real rate is 3.09 percent . What is the rate of inflation ? 29 . Unique Stores common stock pays a constant annual dividend of $ 1.75 a share . What is the value of this stock at a discount rate of 13.25 percent ? 30 . How much are you willing to pay for one share of stock if the company just paid an annual dividend of $ 1.03 , the dividends increase by 3 percent annually , and you require a rate of return of 15 percent ? 31 . The relationship between nominal rates , real rates , and inflation is known as the : term structure of interest rates . 32 . Titan Mining Corporation has 9.5 million shares of common stock outstanding and 390,000 5 percent semiannual bonds outstanding , par value $ 1,000 each . The common stock currently sells for $ 43 per share and has a beta of 1.25 , and the bonds have 15 years to maturity and sell for 114 percent of par . The market risk premium is 8.3 percent , T-bills are yielding 4 percent , and the 33 . Filer Manufacturing has 8.9 million shares of common stock outstanding . The current share price is $ 59 , and the book value per share is $ 4 . The company also has two bond issues outstanding . The first bond issue has a face value of $ 71.2 million and a coupon rate of 7.6 percent 34 . When estimating the cost of equity using the DDM , which one of these is most apt to add error to this estimate ? 35 . When computing WACC , you should use the : 36 . The cost of preferred stock : 37 . The difference between the present value of an investment ’ s future cash flows and its initial cost is the : 38 . Foamsoft sells customized boat shoes . Currently , it sells 16,850 pairs of shoes annually at an average price of $ 79 a pair . It is considering adding a lower-priced line of shoes which sell for $ 49 39 . The net present value method of capital budgeting analysis does all of the following except : 40 . Graham and Harvey ( 2001 ) found that _____ were the two most popular capital budgeting methods .