You purchase at auction a 1000 zero coupon bond that


1. You purchase at auction a $1,000 zero coupon bond that matures in five years for $747. If you hold the bond until maturity, what will be the average annual rate of return on the bond? (Use the time value of money in your calculations.)

2. Calculate the Cost of Common Stock:

•  Common stock sells for $50. D0 = $4.19 and g = 5%.

3. Calculate the Cost of Common stock:

• b = 1.2; rRF = 7%; RPM = 6%.

4. Calculate the monthly payment for a loan of $8,000 at a fixed APR of 9% over a period of four years. How much does the loan cost overall?

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Financial Management: You purchase at auction a 1000 zero coupon bond that
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