1. One year ago, you puchased 175 shares of ABC stock for $43.77 per share. During the year, you received a dividend of $5.66 per share. Today, you sold all your shares for $54.34. What are the percentage return on your investment?
2. ABC Company has $1,000 face value bonds outstanding. These bonds pay interest semiannually, mature in 7 years, and have a 8 percent coupon.The current price of the bond is $900. What is the yield to maturity?
3. ABC Company is considering a new project. The project is expected to generate annual sales of $62,350, variable costs of $16,825, and fixed costs of $16,208. The depreciation expense each year is $17,710 and the tax rate is 32 percent. What is the annual operating cash flow?
4. Suppose the nominal rate is 11.11% and the inflation rate is 6.61%. Solve for the real rate. Use the Fisher Effect formula.
5. Five years ago, ABC Company invested $52,338 in a machinery. The investment in net working capital was $8,588 which would be recovered at the end of the project. Today, ABC Company is selling the machinery for $15,938. The book value of the machinery is $16,024. The tax rate is 30 percent. What are the terminal cash flows in Year 5?