You have been given the opportunity to earn 20,000 five years ...

[lbcchick]

You have been given the opportunity to earn 20,000 five years from now if you invest 9,524 today. What will be the rate of return to your investment?
 
  What will be an ideal response?

Question 2

Which of the following is an advantage for a firm to issue common stock over long-term debt?
 
  A) the cost of equity financing is less than the cost of debt financing
  B) the primary claim of equityholders on income and assets in the event of liquidation
  C) no maturity date on which the par value of the issue must be repaid
  D) the tax deductibility of dividends which lowers the cost of equity financing

[anoriega3]

Answer to Question 1

Use financial calculator: PV= -9524, FV=20000, PMT=0, N=5, CPT I: 16

Answer to Question 2

C

[lbcchick]

Gracias!

[bdobbins]

Excellent