# Compute the The Inventory Conversion Period Business Questions

### Question Description

I’m working on a business question and need an explanation to help me study.

## Question 57

Company A’s most recent dividend was \$1.40, dividend growth is expected to be 3% per year, and investors require 9%. What should the stock’s price be?

## Question 56

If investors require a 7% annual return on a 10% preferred stock with a par value of \$100, which of the following falls closest to where the stock’s price should be?

## Question 55

What is the yield to maturity (YTM) on a bond that was purchased for \$987.65, has a coupon rate of 8%, makes one payment annually, will mature in 10 years, and has a \$1,000 par value?

## Question 54

What is the price of a bond with a coupon payment of \$100 annually, 10 years to maturity, a \$1,000 par value and a yield of 11%?

## Question 48

What is the present value of an annuity due with a payment of \$500 per year at an interest rate of 9% for 15 years?

## Question 47

Hannah has \$1,000 in her bank account which will earn 4% each year forever. If she withdraws only \$10 a year from the annual payment, what is the growth rate of this perpetuity?

## Question 46

An investment costs \$3,000 today and will result in a cash payment of \$6,000 in five years. Which statement about this investment is true, assuming an interest rate of 10%?

## Question 36

Using the capital asset pricing model (CAPM), what is the cost of equity if the risk free rate is 4%, the market return is 6%, and beta is 1.2?

## Question 35

A company has 10 million shares of common stock selling at \$50 a share. It pays a dividend of \$4 this year and the dividend is growing at 5% annually.

According to the Dividend Discount Model (DDM), what is the cost of equity?

## Question 34

What is the component cost of preferred stock for a company that has \$20 million in preferred stock (\$75 par value) that sells for \$70 a share, pays a dividend of \$6.50 each year, and has an effective tax rate of 30%?

## Question 24

### A company has \$30,000 in cash, \$150,000 in inventory, and \$50,000 in Accounts Receivable (A/R). Their Accounts Payable (A/P) is stable at \$25,000. What is this company’s permanent funding need?

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