1. Penzverde Corp. needs to raise funds to finance a plant expansion. Management decided to issue 25-year zero coupon bonds to raise the money. The required rate of return is 4.25%. What will these bonds sell at issuance?
2. Rand Corporation has a 0.5 probability of a return of 0.7, a 0.4 probability of a rate of return of 0.05, and the remaining probability of a -0.28 rate of return. What is the expected rate of return of Rand Corporation?
3. The rate of return on the U.S. government treasury bill is 0.01 and the expected rate of return on the Wilshire 5000 is 0.10 . What is the required rate of return for a stock with a Beta 1.37?