13:18 M O MFnan301FinalExamFall2...ba1995f96f6315dff9f7g) If projects are mutually exclusive, which project would you accept? (5 points)i) at 5%ii) at 15%h) If projects are independent (not mutually exclusive), which project(s) would you accept? (4points)i) at 5%ii) at 15%3. A Macrohard Corp. bond carries an 8% coupon, paid annually and has 10 years to maturity. Thepar value is $1000 and the required rate of return is 5%.a) Calculate the price of the bond today (Po) (5 points)b) Is this a discount or premium bond? Explain? (5 points)c) Calculate the price of the bond one year from now (P1) (5 points)d) If you buy the bond today and sell it one year from now, calculate (10 points)i) Current yieldii) Capital gains yield 13:19 M O -Fnan301FinalExamFall2...ba1995f96f6315dff9f75ii) Capital gains yieldiii) Total rate of return (yield)4. Based on the following information CalculateState of Economy Probability of State of Economy Rate of Return if State OccursStock AStock BRecession0.200.05-0.17Normal0.550.080.12Вoom0.250.130.29a) The expected return of Stock A (7.5 points)b) The expected return of Stock B (7.5 points)c) The expected return of Portfolio where you invest $35,000 in Stock A and $45,000 in Stock B (5points)d) Suppose Stock A has a beta of 0.8 and Stock B has a beta of 1.3. If you invest $35,000 in Stock Aand $45,000 in Stock B, what is the beta of this portfolio? (5 points)e) Expected return on the market (RM) is 10% and the risk-free (rr) is 4%. What must the theexpected return on the portfolio according to CAPM? (Use the beta you have calculated in section d)for CAPM) (5 points)||

Information pertaining to part g and h is missing. Kindly refer below the solution of first three…

3. A Macrohard Corp. bond carries an 8% coupon, paid annually and has 10 years to maturity. The par value is $1000 and the required rate of return is 5%. a) Calculate the price of the bond today (Po) (5 points) b) Is this a discount or premium bond? Explain? (5 points) c) Calculate the price of the bond one year from now (P1) (5 points)

3. A Macrohard Corp. bond carries an 8% coupon, paid annually and has 10 years to maturity. The par value is $1000 and the required rate of return is 5%. a) Calculate the price of the bond today (Po) (5 points) b) Is this a discount or premium bond? Explain? (5 points) c) Calculate the price of the bond one year from now (P1) (5 points)

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 14MC: This calculation determines profitability or growth potential of an investment, expressed as a...

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