FIN 571 Week 6 Assignment

11.20

– the NPV is wrong – the answer to accept it is correct -i have one more

chance to answer correctly12.24 – Both of the answers were wrong

-i

have two more chances to answer correctly.

I

also have these three additional problems that I’ll pay an additional $20.00

for if you’re interested. let me knowthanks for all the hard work, thus far.

Problem 6.27

You

wrote a piece of software that does a better job of allowing computers to

network than any other program designed for this purpose. A large networking

company wants to incorporate your software into their systems and is offering

to pay you $517,000 today, plus $517,000 at the end of each of the following

six years for permission to do this. If the appropriate interest rate is 7

percent, what is the present value of the cash flow stream that the company

is offering you? (Round answer to the nearest whole

dollar, e.g. 5,275.)

$

Present

value

Problem

8.24

Trevor

Price bought 10-year bonds issued by Harvest Foods five years ago for

$952.25. The bonds make semiannual coupon payments at a rate of 8.4 percent.

If the current price of the bonds is $1,014.87, what is the yield that Trevor

would earn by selling the bonds today? (Round

intermediate calculations to 4 decimal places, e.g. 1.2514 and final answer

to 2 decimal places, e.g. 15.25%.)

Effective

annual yield

%

Problem 9.15

The

First Bank of Ellicott City has issued perpetual preferred

stock with a $100 par value. The bank pays a

quarterly dividend of $1.65 on this stock. What is the current price of this

preferred stock given a requiredrate of return of 13.0 percent?(Round answer to 2

decimal places, e.g. 15.25.)