1. Calculate the Macaulay duration of a 4 year, 10% par-value bond with semi-annual coupons, sold to yield 3%. Also calculate the Macaulay convexity of the bond Round your answers to five decimal places.
2. Briefly explain in no more than five sentences, your observations on the trend charts of Amazon’s and eBay’s Revenues, Operating Income and Net Income. How are the two companies’ trends on these Revenues, Operating and Net Income similar? How are they different?
3. Kelly Corporation has a weighted average cost of capital of 10.0 percent. The company’s cost of equity is 14 percent, and its pretax cost of debt is 8.0 percent. The tax rate is 38 percent. What is the company's debt-equity ratio?