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Author Question: Preferred stock and common stock issued by the same firm will have the same required return because ... (Read 118 times)

kodithompson

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on: Jul 10, 2018
Preferred stock and common stock issued by the same firm will have the same required return
  because the riskiness of the firm's cash flows is the same for both securities.
 
  Indicate whether the statement is true or false

Question 2

You plan to place a 40,000 down payment on a lake cabin in Northern Minnesota in five years. If you invest in a long-term CD earning an annual rate of 5.50, how much would you need to invest today to have enough for the down payment in five years?
 
  A) 33,326
  B) 30,605
  C) 24,379
  D) 18,264
Foundations of Finance ¦ Keown, Petty, Martin ¦ 9th Edition
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zacnyjessica

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Reply #1 on: Jul 10, 2018
Answer to Question 1

FALSE

Answer to Question 2

Answer: B
Explanation: B) PV = = = 30,605.37
MODE = END
INPUT 5 5.5 ? 0 -40,000
KEY N I/Y PV PMT FV
CPT 30,605.37


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kodithompson

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Reply #2 on: Jul 10, 2018
TY


zacnyjessica

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Reply #3 on: Jul 10, 2018
Happy to Help


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