UNIT 2 TEXTBOOK PROBLEMS
CHAPTER 4: PROBLEM 2 (a through c)
|
A.
|
B.
|
C.
|
|
|
Present Value
|
3,200
|
3,200
|
3,200
|
|
Interest Rate
|
6%
|
8%
|
6%
|
|
Number of Years
|
10
|
10
|
20
|
|
Future Value =
|
|
|
|
|
CHAPTER 4: PROBLEM 3
|
||||
|
A.
|
B.
|
C.
|
D.
|
|
|
Future Value =
|
15,451
|
51,557
|
886,073
|
550,164
|
|
Interest Rate
|
7%
|
9%
|
14%
|
16%
|
|
Number of Years
|
12
|
8
|
19
|
24
|
|
Present Value =
|
|
|
|
|
|
CHAPTER 4: PROBLEM 4
|
||||
|
A.
|
B.
|
C.
|
D.
|
|
|
Present Value =
|
217
|
432
|
41,000
|
54,382
|
|
Future Value
|
307
|
896
|
162,181
|
483,500
|
|
Number of Years
|
3
|
10
|
13
|
26
|
|
Interest Rate
|
|
|
|
|
|
CHAPTER 4: PROBLEM 5
|
||||
|
A.
|
B.
|
C.
|
D.
|
|
|
Present Value =
|
625
|
810
|
18,400
|
21,500
|
|
Future Value
|
1,284
|
4,341
|
402,662
|
173,439
|
|
Interest Rate
|
9%
|
11%
|
7%
|
10%
|
|
Number of Years (or Periods)
|
|
|
|
|
|
CHAPTER 4: PROBLEM 11
|
||||
|
Discount Rate
|
5%
|
13%
|
18%
|
|
|
Year 1:
|
$960
|
$960
|
$960
|
|
|
Year 2:
|
$840
|
$840
|
$840
|
|
|
Year 3:
|
$1,935
|
$1,935
|
$1,935
|
|
|
Year 4:
|
$1,350
|
$1,350
|
$1,350
|
|
|
Present Value @ 5%, 13%, and 18% =
|
|
|
|
(Note: Use the built-in NPV formula in
Excel.)
|
CHAPTER 5: PROBLEM 2
|
A.
|
||
|
Settlement
|
|
(Think of Settlement as the beginning of the
duration of the bond.)
|
|
Maturity
|
|
(Think of Maturity as the end of the duration of
the bond.)
|
|
Rate
|
|
(Coupon Rate)
|
|
YTM
|
|
(Yield to Maturity or Required Rate of Return)
|
|
Redemption
|
|
(Bonds Face Value, Par Value, or Fair Price; Note
that is $100, not $1,000. You make the adjustments by multiplying the answer
by 10.)
|
|
Frequency
|
|
(Coupon payments are semiannual, so you put in a
2. If they are annual, then you input a 1.)
|
|
Basis
|
|
(Always leave it blank.)
|
|
Bond Price
|
|
(The answer. But you need to multiply it by 10 to
get the actual bond price.)
|
|
Multiply by 10
|
|
(Microsoft gives the bond price in 2 digits. You
need to multiply it by 10 to get the actual bond price.)
|
CHAPTER 5: PROBLEM 3
|
Dividend Payment
|
$1.99
|
|
Dividend Growth Rate
|
4.50%
|
|
ZYX Stock Price
|
$31
|
|
Required Return =
|
|
CHAPTER 6: PROBLEM 4
|
Dividend
|
$2.65
|
|
Dividend increase per year
|
4.75%
|
|
Required Return (Return on Investment)
|
11%
|
|
Stock Price =
|
|
File name: cf template
textbook problems Unit 2.xlsx File type: . xlsx PRICE:$20
