1. Compute the risk premium (this is part of the required rate of return – I am not looking for the full RRR here) for the stock of Omega Tools if the risk free rate is 6%, the expected market return is 12%, and Omega's stock has a beta of .8.
2. What is your yield-to-maturity if you buy a Duke bond for $1,085? It pays a 5% coupon and matures in 8 years.
3. Please write at least three well composed paragraphs that explain the cash realization cycle. What role does inventory turnover and receivable collection play in the realization of cash for a business?