Consumer Math - Interest Rates

See attached file for full problem description.

Corporate after tax yields/rate of return/finance problems

3-5 The Shrieves Corporation has $10,000 that it plans to invest in marketable securities. It is choosing among AT&T Bonds, which yield 7.5%, state of Florida muni bonds, which yield 5%, and AT & T preferred stock , with a dividend yield of 6%. Shrieves' corporate tax is rate is 35%, and 70% of the dividends received are tax exempt. Assuming that the investments are equally risky and that Shrieves chooses strictly on the basis of after-tax returns, which security should be selected? What is the after-tax rate of return on the highest yielding security? 3-7 The Menendez Corporation expects to have sales of $12 million. Costs other than depreciation are expected to be 75% of sale... click for more

Stock's expected return, standard deviation, and coefficient of variation.

A Stock's return has the following distribution: Demand for the company's products: Probability of this rate of return if it demand occurring occurs Weak 0.1 (50%) Below average 0.2 (5) average 0.4 16 above average 0.2 25 ... click for more

Bond Valuation

The Heymann comapny's bonds have 4 years remaining to maturity. Interest is paid annually; the bonds have a $1,000 at maturity. Bond L has a maturity of 15 years, and Bond S a maturity of 1 year. a/ What will be the value of each of these bonds when the going rate of interest is (1) 5 percent, (2) 8 %, and (3) 12 %. Assume that there is only one more interest payment to be made on Bond S. b. Why does the longer term (15 year) bond fluctuate more when interest rates change than does the shorter-term bonds (1 year)?

Yield to Maturity for the Heymann Company's bonds

The Heymann Company's bonds have 4 years remaining to maturity. Interest is paid annually; the bonds have a $1,000 par value; and the coupon interest rate is 9%. a/ What is the yield to maturity at a current market price of (1) $829 or (2) $1,104? b/ Would you pay $829 for one of these bonds if you thought that the appropriate rate of interest was 12% - that is, if rd = 12%? Explain your answer