Please show your work step by step and related formulas used.
Question 1. What is the expected constant-growth rate of dividends for a stock with a current price of $87, an expected next period dividend payment of $5.40 per share, and a discount rate of 16%?
Question 2. What is the yield to maturity of a $1000 par value bond that has a 9 1/2 percent coupon, pays interest semi-annually, has 12 years to maturity, and sells for $871.50?
Question 3. Chill Pill Pharmaceuticals is expecting a growth rate of 14% for the next two years due to its new drug. Thereafter it should level to an 8% growth rate. The last dividend paid was $.65 per share (paid today). What price should the stock sell for if investors require 12% return.
Question 4. The expected before-tax cost of capital for long-term debt, preferred stock, and common equity is 9%, 11%, and 15%, respectively. If the company's tax rate is 33.3% and new investments are financed by 40% debt, 10% preferred stock, and 50% common equity, then the weighted average cost of capital to the firm is ______% .
Question 5. If Power-On Inc. has a total asset turnover of 1.8, a fixed asset turnover of 3.2, a debt ratio of 0.5 and a total debt of $200,000, then fixed assets are
Question 6. How much cash and marketable securities does Gray Day Computer Co. have if the firm has a current ratio of 2.5, a quick ratio of 1.2, and current liabilities of $12,000. Gray's credit sales are $98,000 and its average collection period is 40 days? (Assume 365 days per year.)
Question 7. What is the return on assets (investment) for a firm that has a debt ratio of 0.65, a net profit margin of 6.5%, sales of $740,000, and a total asset turnover of 4?