1. Discuss some of the options a firm has when it has trouble meeting its debt obligations.
2. If $90,000 is invested in a fund on December 31, 2016, and 5 equal annual withdrawals of $23,138.32 are made starting on December 31,2017, that will deplete the fund, what is the interest rate being earned if interest is compounded annually?
3. A company’s stock return has a standard deviation of 12%. The correlation coefficient between the stock and S&P 500 Index is 0.6. S&P 500 Index has an expected return of 11% and a standard deviation of 5%. Currently T-bill rate is 5%.
What is the beta of this stock?