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Devry Fin351 final exam

Description

solution to these Questions


Question

Question

 

1. (The stock of Trudeau Corporation went from $27 to $40 last year.

 

The firm also paid $1 in dividends during the same year. Thereafter, in the

 

following year, the dividend was raised to $1.40. However, a declining market

 

toward the end of the year caused the stock to fall to $24 per share from $40.

 

Compute the rate of return (gain or loss) to the stockholder in the following

 

year.

 

2. Given the following financial data, compute the return on assets

 

and return on equity: net income/sales = 6%, sales/total assets = 2.5X, and

 

debt/total assets = 25%.

 

3.

 

What is the approximate

 

yield to maturity of an 8% coupon bond with a par value of $1,000? The bond is

 

currently selling for $920 and has 5 years to maturity.

 

4. A convertible bond has a face value of $1,000 and the conversion

 

price is $60 per share. The stock is selling at $25 per share. The bond pays

 

$85 per year in interest and is selling in the market for $945. It matures in 7

 

years. Market rates are 10% annually.

 

(I) What is the conversion ratio?

 

(II) What is the conversion value?

 

5. If a $100,000 Treasury bond futures contract changes by 5/32, what

 

is the dollar change?

 

6. A mutual fund is set up to charge a load. Its net asset value is

 

$23.40 and its offer price is $24.70. What is the dollar value of the load (commission)?

 

7. A shopping center has an annual net operating income of $1,025,000

 

and a capitalization rate of 10%. What is its value?

 

8.An investment has the

 

following range of outcomes and probabilities.

 

Outcomes (Percent)

 

Probabilities of

 

Outcomes

 

5%

 

.25

 

7%

 

.50

 

12%

 

.25

 

Calculate the expected value and the standard deviation (round to two places

 

after the decimal point where necessary). (Points

 

: 15)

 

Paper#51373 | Written in 25-Oct-2015

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