1. Jessi corporation is planning an bond issue to finance a new project. Jessi plans to issues 2000 bondswith a face value of 1000 each and a coupon of 12 %, The tax rate is 40 %. projected earnings after completion of project are $2 million and shares outstanding will total 200,000. what is the projected EPS after completion of the project?
A . $5.18
B. $5.28
C. 5.38
D. None of the above
2. Many bond agreements require the issuing firm to have a schedule of payment known as
A. Sinking Funds
B. Call prices
C. Call options
3. Which of the following elements is needed to calculate present value payback?
a. Initial Investment
b. The present value of annual cash flows
c. Both A and B
d. Neither A nor B
4. The retained earnings account is a part of which of the following accounts?
a. Owner’s equity
b. Liabilities
c. Capital stock
d. Long term assets