3. Common stock valuation (perpetuity with growth model). Use the constant growth model to compute the expected return for the following common stock: annual dividend $2, growth rate in dividends 10%, price $22.

For diagrams (a) to (d), compute the present values of the cash flows.

How much cash did Chester Pharmacy pay out for the depreciation expense during 2005? O $1,500 O $25 O s0

1. Explain whether each of the following events will increase, decrease, or have no effect on long-run aggregate supply. a. Country invites more expats. b. Government raises the minimum wage. c. Intel invents a new and more powerful computer chip. d. A new virus results in close down of many companies

You are planning to withdraw $100 in Year 1, $150 in Year 3, and $200 in Year 5. At a 5% interest rate, what is the present worth of these withdrawals?

A fırm has borrowed $5,000,000 for 5 years at 10% per year compound interest. The firm will make no payments until the loan is due, when it will pay off the interest and principal in one lump sum. What is the total payment?

a. What is the relationship between the price of a bond and its YTM? b. Explain why some bonds sell at a premium over par value while other bonds sell at a discount. What do you know about the relationship between the coupon rate and the YTM for premium bonds? What about for discount bonds? For bonds selling atparvalue? c. Dote Plc has 8.5 per cent coupon bonds on the market that have 12 years left to maturity. The bonds make annual payments. The par value of the bond is£1000. If the YTM on these bonds is 7.2 per cent, what is the current bond price? d. Kipi has 8 per cent coupon bonds making annual payments with a YTM of 7.2per cent. The current yield on these bonds is 7.55 per cent. How many years do these bonds have left until they mature? e. Keele has bonds on the market making annual payments, with 12 years to maturity, and selling for €1,045. At this price, the bonds yield 7 per cent. The par value of the bond is €1000. What must the coupon rate be on the bonds?

The U.S. Bureau of Reclamation is considering a project to extend irrigation canals into a desert area. The initial cost of the project is expected to be $1.5 million, with annual maintenance costs of $25,000 per year. (a) If agricultural revenue is expected to be $175,000 per year, do aB/C analysis to determine whether the project should be undertaken, using a 20-year study period and a discount rate of 6% per year. (b) Rework the problem, using the modified B/C ratio.

A piece of equipment is purchased for $40,000 and has an estimated salvage value of $1,000 at the end of the recovery period. Prepare a depreciation schedule for the piece of equipment using the 200% declining-balance method with a recovery period of five years.

10. Christina and Dasha are twins. They each invest $5000 on their 14th birthday. Christina invests in a plan with interest at 8% per year, compounded semi-annually. Dasha invests in a plan with interest at 5.5% per year,compounded quarterly. They both take their investments out on their 18th birthday. Which twin earned more interest? How much greater was her investment? [7A] Therefore,will have earned $more for her investment.