Which of the following statements is correct? a. a. except in situations where compounding occurs annually, the periodic interest rate exceeds the nominal interest rate. b. b. the effective annual rate always exceeds the nominal rate, no matter how few or many compounding periods occur each year. c. c. if compounding occurs more frequently than once a year, and if payments are made at times other than at the end of compounding periods, it is impossible to determine present or future values, even with a financial calculator. the reason is that under these conditions, the basic assumptions of discounted cash flow analysis are not met. d. d. assume that compounding occurs quarterly, that the nominal interest rate is 8 percent, and that you need to find the present value of $ 1,000 due 6 months from today. you could get the correct answer by discounting the $ 1,000 at 2 percent for 2 periods. e. e. statements a, b, c, and d are all false.

Examine the following book-value balance sheet for university products inc. the preferred stock currently sells for $30 per share and pays a dividend of $3 a share. the common stock sells for $16 per share and has a beta of 0.9. there are 2 million common shares outstanding. the market risk premium is 9%, the risk-free rate is 5%, and the firm’s tax rate is 40%. book-value balance sheet (figures in $ millions) assets liabilities and net worth cash and short-term securities $ 2.0 bonds, coupon = 6%, paid annually (maturity = 10 years, current yield to maturity = 8%) $ 5.0 accounts receivable 3.0 preferred stock (par value $15 per share) 3.0 inventories 7.0 common stock (par value $0.20) 0.4 plant and equipment 21.0 additional paid-in stockholders’ equity 13.6 retained earnings 11.0 total $ 33.0 total $ 33.0 a. what is the market debt-to-value ratio of the firm? (do not round intermediate calculations. enter your answer as a percent rounded to 2 decimal places.) b. what is university’s wacc? (do not round intermediate calculations. enter your answer as a percent rounded to 2 decimal places.)

When the federal reserve buys bonds from or sells bonds to member banks, it is called monetary policy reserve ratio interest rate adjustment open market operations

Suppose your rich uncle gave you $50,000, which you plan to use for graduate school. you will make the investment now, you expect to earn an annual return of 6%, and you will make 4 equal annual withdrawals, beginning 1 year from today. under these conditions, how large would each withdrawal be so there would be no funds remaining in the account after the 4th withdraw?