16.

value:

10 points You own a portfolio that has $1,850 invested in Stock A and $3,650 invested in Stock B. If the expected returns on these stocks are 10 percent and 15 percent, respectively, what is the expected return on the portfolio?(Do not round your intermediate calculations.)
-2-2

13.32% 12.50% 13.58% 13.98% 11.68%

19.
value:

10 points The next dividend payment by Hot Wings, Inc., will be $3.45 per share. The dividends are anticipated to maintain a 2 percent growth rate forever. Required: If the stock currently sells for $47 per share, what is the required return?
-2-2

2.00% 9.34% 7.34% 8.87% 9.15%

24.
value:

10 points You want to buy a new sports car from Muscle Motors for $32,000. The contract is in the form of a 60-month annuity due at a 9.00 percent APR. Required: What will your monthly payment be?
-2-2

$672.51 $626.36 $659.32 $664.27 $646.14

25.
value:

10 points
-2-2 http://ezto.mhhm.mcgraw -hill.com/1325269821348637353.tp4?REQUEST=SHOWmedia&media=,

You have just made your first $2,000 contribution to your retirement account. Assuming you earn an 9 percent rate of return and make no additional contributions. Required: (a) What will your account be worth when you retire in 30 years?
(Click to select)

(b) What will your account be worth if you wait 5 years before contributing?
(Click to select)

27.
value:

10 points The appropriate discount rate for the following cash flows is 14 percent compounded quarterly. Year 1 2 3 4
Required:

Cash Flow $900 700 0 1,100

What is the present value of the cash flows?

-2-2

$1,911.34 $1,979.39 $342.35 $1,950.35 $1,989.36

33.
value:

10 points
-2-2 http://ezto.mhhm.mcgraw -hill.com/1325269821348637353.tp4?REQUEST=SHOWmedia&media=,

In 1895, the first a sporting event was held. The winner's prize money was $110. In 2007, the winner's check was $1,174,000. (Do not round your intermediate calculations.) Required: (a) What was the percentage increase per year in the winner's check over this period?
8.68

(b) If the winner's prize increases at the same rate, what will it be in 2040?
(Click to select)

34.
value:

10 points Marcel Co. is growing quickly. Dividends are expected to grow at a 19 percent rate for the next 3 years, with the growth rate falling off to a constant 5 percent thereafter. Required: If the required return is 12 percent and the company just paid a $3.60 dividend. what is the current share price? (Do not round your intermediate calculations.)
-2-2

$75.44 $70.04 $72.66 $78.52 $76.98

35.
value:

10 points You need a 25-year, fixed-rate mortgage to buy a new home for $230,000. Your mortgage bank will lend you the money at a 6 percent APR for this 300-month loan. However, you can afford monthly payments of only $900, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment. Required: How large will this balloon payment have to be for you to keep your monthly payments at $900?
-2-2

$419,378.43 $391,151.04 $403,248.49 $90,313.82 $71,764.12

36.
value:

10 points What is the future value of $600 in 24 years assuming an interest rate of 13 percent compounded semiannually?
-2-2

$911.77 $772.71 $11,712.67 $11,272.85 $12,329.13

37.
value:

10 points You're prepared to make monthly payments of $380, beginning at the end of this month, into an account that pays 6 percent interest compounded monthly.
Required:

How many payments will you have made when your account balance reaches $24,488? (Do not round your intermediate calculations.)
-2-2

50.4 27.16 4.79 56 61.6

38.
value:

10 points Suppose an investment offers to triple your money in 48 months (don't believe it).
Required:

What rate of return per quarter are you being offered?

-2-2

7.11% 9.59% 5.31% 7.82% 6.4%

39.
value:

10 points Given an interest rate of 5.0 percent per year, what is the value at date t = 5 of a perpetual stream of $700 payments that begins at date t = 12?
-2-2

$10,447.02 $14,000.00 $9,949.54 $10,238.08 $10,655.96

40.
value:

10 points A stock has a beta of 1.8, the expected return on the market is 11 percent, and the risk-free rate is 6.6 percent. What must the expected return on this stock be?
-2-2

15.25% 14.52% 15.1% 13.79% 26.4%