1. Use the following information to calculate the net cash provided or used by financing activities for the Brooks Corporation:
(a) Net income, $10,000.
(b) Sold common stock for $4,000 cash.
(c) Paid cash dividend of $3,000.
(d) Paid bond payable, $8,000.
(e) Purchased equipment for $12,000 cash.
2. A three-year bond provides a coupon of 6% semiannually and has a cash price of 105. What is the bond’s yield?
3. Use the risk-free rates in Problem 4.6 to value an FRA where you will pay 5% for the third year and receive LIBOR on $1 million. The forward LIBOR rate (annually compounded) for the third year is 5.5%.
4. You are scheduled to receive annual payments of $8,600 for each of the next 27 years. The discount rate is 7.0 percent. What is the difference in the present value if you receive these payments at the beginning of each year rather than at the end of each year?