Three Finance Problems

| July 29, 2018

Income StatementSales2014201377000 70000Operating costs excludingdepreciationDepreciation and amortization65520 5950026602520Eranings before interest and taxesLess interestTaxable IncomeTaxes (35%)882084079802793798070072802548Net income available toshareholders51874732Common Dividends??14003332Balance SheetAssetsCashShort-term investmentsAccounts receivablesInventories201420133850770192501155035007001750010500Total currentAssetsNet plant and equipmentTotal assets35420 3220026950 2450062370 56700Liabilities and EquityAccounts payableAccrualsNotes payableTotal current liablitiesLong-term debtTotal liabilities77003850268814238770021938Common stock (paid-incapital)30184 30800Retained earningsTotal common equity10647 700040831 37800Total liablities and equity7000350014001190070001890062769 56700QuestionsGiven the following income statement and balance sheet for WoodStock company. How much totaldividends were paid in fiscal year 2014 and how much were the retained earnings for the year 2014?Question 2You can invest your money in CD 1 that pays 14% rate if return per year compoundedsemiannually or you can invest it in CD 2 that pays 14% rate of return per yearcompounded weekly. You have $50,000 to invest for 5 years. At the end of 5 years,how much more money will have if you invest your money in CD 2 instead of CD 1?An investor has two bonds (Bond A & Bond B) in her portfolio. Each bond matures in 8 years, has a facevalue of $1,000, has a yield to maturity of 7.5%. Bond A pays an annual coupon of 5%, Bond B pays anannual coupon of 10% (rates are always quoted annually regardless of the coupon frequency). Both bondspay their coupons semiannually. Assuming that the yield to maturity of each bond stays the same over itsentire life, what will be price of each bond at the end of each year of its life. In other words, complete thistable.

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