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Problem 1: "Mr.Maghari paid P200,000 as down payment for a car. The remaining amount is to be settled by paying P16, 200 at the end of each month for 5 years. If interest is 10.5% compounded monthly, what is the cash price of his car?" 1. Give the interest rate per conversion period used in the problem. b. 0.0105 c. 0.0875 d. 0.00875 a. 0.105 2. What is the periodic or regular payment? a. P200,000 c. P20,000 d. P30,000 b. P16,200 3. How many payments will Mr.Maghari make in the annuity? b. 12 a. 5 c. 30 d. 60 4. Find the present value of the installment basis a. P744,937.24 5. What is the cash price of the car? a. P944,937.24 b. P744,397.24 c. P743,937.42 d. P743,397.24 b. P944,397.24 c. P943,937.42 d. P943,397.24 Problem 2: "Consider a preferred stock with par value P4,000 per share, 8% dividend rate paid quarterly, and a life of 15 years. If the required annual rate of returns is 10%, what must be the price per share of the stock? 6. What is the payment interval in the problem? a. Every 2 months 7. Compute for the amount of dividend per quarter a. P120 8. What is the present value of the dividend? a. P2,472.69 9. Give the value per share of the stock in 15 years. a. P2,742.69 10. Determine the present value per share of the stock in 15 a. P909.13 b. Every 3 months c. Every 4 months d. Every 6 months b. P100 C. P80 d. P60 b. P2,742.69 c. P7,442.69 d. P7,424.69 b. P4,000.00 c. P400 d. P200 years. b. P990.13 c. P1009.13 d. P1090.13 11. What must be the price per share of the stock? a. P8331.82 b. P8313.82 c. P3381.82 d. P3831.82

Problem 1: "Mr.Maghari paid P200,000 as down payment for a car. The remaining amount is to be settled by paying P16, 200 at the end of each month for 5 years. If interest is 10.5% compounded monthly, what is the cash price of his car?" 1. Give the interest rate per conversion period used in the problem. b. 0.0105 c. 0.0875 d. 0.00875 a. 0.105 2. What is the periodic or regular payment? a. P200,000 c. P20,000 d. P30,000 b. P16,200 3. How many payments will Mr.Maghari make in the annuity? b. 12 a. 5 c. 30 d. 60 4. Find the present value of the installment basis a. P744,937.24 5. What is the cash price of the car? a. P944,937.24 b. P744,397.24 c. P743,937.42 d. P743,397.24 b. P944,397.24 c. P943,937.42 d. P943,397.24 Problem 2: "Consider a preferred stock with par value P4,000 per share, 8% dividend rate paid quarterly, and a life of 15 years. If the required annual rate of returns is 10%, what must be the price per share of the stock? 6. What is the payment interval in the problem? a. Every 2 months 7. Compute for the amount of dividend per quarter a. P120 8. What is the present value of the dividend? a. P2,472.69 9. Give the value per share of the stock in 15 years. a. P2,742.69 10. Determine the present value per share of the stock in 15 a. P909.13 b. Every 3 months c. Every 4 months d. Every 6 months b. P100 C. P80 d. P60 b. P2,742.69 c. P7,442.69 d. P7,424.69 b. P4,000.00 c. P400 d. P200 years. b. P990.13 c. P1009.13 d. P1090.13 11. What must be the price per share of the stock? a. P8331.82 b. P8313.82 c. P3381.82 d. P3831.82

Corporate Fin Focused Approach
Corporate Fin Focused Approach
5th Edition
ISBN:9781285660516
Author:EHRHARDT
Publisher:EHRHARDT
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 2STP
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Problem 1: "Mr.Maghari paid P200,000 as down payment for a car. The remaining amount is to be settled by paying P16, 200 at the end of each month for 5 years. If interest is 10.5% compounded monthly, what is the cash price of his car?" 1. Give the interest rate per conversion period used in the problem. b. 0.0105 c. 0.0875 d. 0.00875 a. 0.105 2. What is the periodic or regular payment? a. P200,000 c. P20,000 d. P30,000 b. P16,200 3. How many payments will Mr.Maghari make in the annuity? b. 12 a. 5 c. 30 d. 60 4. Find the present value of the installment basis a. P744,937.24 5. What is the cash price of the car? a. P944,937.24 b. P744,397.24 c. P743,937.42 d. P743,397.24 b. P944,397.24 c. P943,937.42 d. P943,397.24
Transcribed Image Text:Problem 1: "Mr.Maghari paid P200,000 as down payment for a car. The remaining amount is to be settled by paying P16, 200 at the end of each month for 5 years. If interest is 10.5% compounded monthly, what is the cash price of his car?" 1. Give the interest rate per conversion period used in the problem. b. 0.0105 c. 0.0875 d. 0.00875 a. 0.105 2. What is the periodic or regular payment? a. P200,000 c. P20,000 d. P30,000 b. P16,200 3. How many payments will Mr.Maghari make in the annuity? b. 12 a. 5 c. 30 d. 60 4. Find the present value of the installment basis a. P744,937.24 5. What is the cash price of the car? a. P944,937.24 b. P744,397.24 c. P743,937.42 d. P743,397.24 b. P944,397.24 c. P943,937.42 d. P943,397.24
Problem 2: "Consider a preferred stock with par value P4,000 per share, 8% dividend rate paid quarterly, and a life of 15 years. If the required annual rate of returns is 10%, what must be the price per share of the stock? 6. What is the payment interval in the problem? a. Every 2 months 7. Compute for the amount of dividend per quarter a. P120 8. What is the present value of the dividend? a. P2,472.69 9. Give the value per share of the stock in 15 years. a. P2,742.69 10. Determine the present value per share of the stock in 15 a. P909.13 b. Every 3 months c. Every 4 months d. Every 6 months b. P100 C. P80 d. P60 b. P2,742.69 c. P7,442.69 d. P7,424.69 b. P4,000.00 c. P400 d. P200 years. b. P990.13 c. P1009.13 d. P1090.13 11. What must be the price per share of the stock? a. P8331.82 b. P8313.82 c. P3381.82 d. P3831.82
Transcribed Image Text:Problem 2: "Consider a preferred stock with par value P4,000 per share, 8% dividend rate paid quarterly, and a life of 15 years. If the required annual rate of returns is 10%, what must be the price per share of the stock? 6. What is the payment interval in the problem? a. Every 2 months 7. Compute for the amount of dividend per quarter a. P120 8. What is the present value of the dividend? a. P2,472.69 9. Give the value per share of the stock in 15 years. a. P2,742.69 10. Determine the present value per share of the stock in 15 a. P909.13 b. Every 3 months c. Every 4 months d. Every 6 months b. P100 C. P80 d. P60 b. P2,742.69 c. P7,442.69 d. P7,424.69 b. P4,000.00 c. P400 d. P200 years. b. P990.13 c. P1009.13 d. P1090.13 11. What must be the price per share of the stock? a. P8331.82 b. P8313.82 c. P3381.82 d. P3831.82
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