1. Brandon LLC has a 5.2 percent coupon bond with 13 years left to maturity that can be called in 8 years. The call premium is one year of coupon payments. It is offered for sale at $987.35. Calculate the bond's yield to maturity, yield to call, and current yield. Assume semiannual payments and Face Value of $1,000.

2. A 7 percent coupon bond (from Parker Inc.) with 9 years left to maturity is priced to offer a 6.5 percent yield to maturity. You believe that in one year the current yield will be 7 percent. What is the change in price the bond will experience in dollars? Assume yearly payments and face value of $1,000.

3. Leanna Inc. recently paid a dividend of $3.00 per share. The dividend is expected to increase at a 30 percent rate for the next 3 years. Afterwards, a more stable 14 percent growth rate can be assumed. If a 18 percent discount rate is appropriate for this stock, what is its value (P0)?

4. Garret Jones's Shop (GJS) has earnings per share of $7.75 and P/E of 42.56. What is the stock price?

5. Compute the standard deviation of the expected return for Russell LLC given these 3 economic states, their likelihoods, and the potential returns for :

Economic States Probability Return Fast Growth 0.4 20% Slow Growth 0.3 10% Recession 0.3 -5%

6. The returns of the past four months for Katah Inc are 9%, 4%, -6%, and 6%. What is Katah Inc's standard deviation?

7. Lyndee believes her firm will earn a 10 percent return next year. Her firm has a beta of 1. 5, the expected return on the market is 15 percent, and the risk-free rate is 5 percent. Compute the return the firm should earn given its level of risk and determine whether Lyndee is saying the firm is under-valued or over-valued.

8. Calculate the WACC for Ariana's under the following scenario:

? 90,000 bonds outstanding, with a coupon rate of 7%, paid yearly, 13 years to maturity, and sold at 102% par value. The corporate tax rate is 40%. ? 6 million shares of common stock, sold at $60, and a future dividend of $6.

The dividend will grow at a 0.5% rate forever. The stock has a beta of 2, the market return is 8%, and the risk-free rate is 3%. ? 2 million shares of preferred stock, sold at 90% of face value, and with a dividend of 6.5% of face value.