1. Deltona Motors just issued 225,000 zero coupon bonds. These bonds mature in 20 years, have a par value of $1,000, and have a yield to maturity of 7.45 percent. What is the approximate total amount of money the company raised from issuing these bonds? (Assume semi-annual compounding)
A. $48.20 million
B. $55.14 million
C. $52.10 million
D. $162.08 million
E. $225.00 million
F. None of the answers above are correct
2. The annual interest divided by the face value of a bond is referred to as the:
A. market rate.
B. coupon rate.
C. yield-to-maturity.
D. current yield.
E. call rate.
F. None of the answers above are current
3. Assume that a company’s dividends per share are projected to remain at $1.20 each year, and that its cost of equity capital is 5%. The company’s per-share stock price is close to A) $20 B) $21 C) $23 D) $24