1. Your firm is issuing 14-year zero coupon bonds with a 5% yield and pays annually. The goal is to raise $3,000,000. What is your company’s total repayment 14 years from now?
2. The risk-free rate is 5.3%, the market risk premium is 6.9%, and the stock’s beta is 0.64. What is the required rate of return on the stock, E(Ri)? Use the CAPM equation.
3. Suppose the real rate is 12.83% and the inflation rate is 5.34%. What is the nominal rate? Use the Fisher Equation to get the answer.