1. How much should you pay for a $2,000 bond with 10% coupon, annual payments, and five years to maturity if the interest rate is 12%. Please corrilate numbers with financial calulator use as well.
2. A firm’s gross profit margin has stayed constant from 2016 to 2017 but its net profit margin has declined over the same period. What does this tell you about how the firm’s COGS, its expenses, and its taxes have changed over 2016 to 2017?
3. A firm’s times interest earned ratio is 3 but its cash flow to long-term debt ratio is only 0.75. Taken together, does this information mean that a long-term lender should be concerned about lending this firm money long term?