For a price of $100, Rad will sell you a 5 year bond paying semi-annual coupons of 16% pa. The face value of the bond is $100. Other bonds with the same risk, maturity and coupon characteristics trade at a yield of 6% pa.

The below graph shows a project's net present value (NPV) against its annual discount rate.

For what discount rate or range of discount rates would you accept and commence the project?

All answer choices are given as approximations from reading off the graph.

**Question 657** systematic and idiosyncratic risk, CAPM, no explanation

A stock's **required** total return will **decrease** when its:

A company conducts a **2** for **3** rights issue at a subscription price of $**8** when the pre-announcement stock price was $**9**. Assume that all investors use their rights to buy those extra shares.

What is the percentage increase in the stock price and the number of shares outstanding? The answers are given in the same order.

**Question 737** financial statement, balance sheet, income statement

Where can a publicly listed firm's book value of equity be found? It can be sourced from the company's:

In the home loan market, the acronym LVR stands for Loan to Valuation Ratio. If you bought a house worth one million dollars, partly funded by an $800,000 home loan, then your LVR was 80%. The LVR is equivalent to which of the following ratios?

A **put** option written on a risky non-dividend paying stock will mature in one month. As is normal, assume that the option's exercise price is non-zero and positive ##(K>0)## and the stock has limited liability ##(S>0)##.

Which of the following statements is **NOT** correct? The **put** option's: