1. A five-year, 4 percent Euroyen bond sells at par. A comparable risk five-year, 5.5 percent yen/dollar dual-currency bond pays $833.33 at maturity per ¥100,000 of face value. It sells for ¥120,000. What is the implied ¥/$ exchange rate at maturity? Use Financial Calc EX: PV,PMT,IY,FV,N
2. Bolster Foods’ (BF) balance sheet shows a total of $25 million long-term debt with a coupon rate of 8.50%. The yield to maturity on this debt is 8.00. The balance sheet also shows that the company has 10 million shares of stock, and the stock has a book value per share of $5.00. The stockholders' required rate of return, rs, is 12.00%. The tax rate is 40%. Calculate WACC based on book values.
3. Using cost measurement, CVP analysis, budgeting, sunk costs, and corporate strategy concepts, how would you advise your company to make smarter capital investments?