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Page 1 of 4 Goldey-Beacom College Municipal Finance (FIN623) I. Elsaify Final Exam Spring II, 2013 Warning You entertain promised, and are expected to, finished this Exam over. You are not attributable attributable attributable to examine the Exam, or any disunite of it, in any coercionm with anybody lower any case. Any indication to the incompatible obtain outcome in a unsound trice in the continuity and a reversal of the Academic Honor Code. Instructions: 1. Your Answer must be submitted by influence by 1:00pm Saturday, 4/27/2013 2. Your persuade must be written on entire page. 3. Your Answer cannot attributable yield the Exam 4 pages. Page 2 of 4 1. (15 Points) Mr. Alert Tucker of Pleasant Valley, Ohio is an investor who is spirited in allocating disunite of his portfolio to investment-trice municipal compacts with 15-year manliness. He recently current two proposals to cull from. Prudential: A 7% coupon compact that sells coercion $1,100. Coupon payments are made semiannually. Morgan Stanley: A 6% coupon compact that sells coercion $980. Coupon payments are made per-annum. a. Proportion each liberty YTM and CY. b. If Prudential compact can be named at the purpose of five years at a persuade treasure of 950, proportion YTC. c. If Morgan Stanley compact can be named at the purpose of seven years at a persuade treasure of 985, proportion YTC. Answer a. Compact N PMT FV PV I=YTM CY Prudential Morgan Stanley b. Compact N PMT CV PV YTC Prudential c. Compact N PMT CV PV YTC Morgan Stanley Page 3 of 4 2. (15 Points) DesinceLogic is a steadsteadfast extending association that distributes 20% of its rights as dividends. An institutional investor plans to halt the association supply coercion 10 years. The investor seeks 15% trounce of come-back, and expects the supply to be traded at 30 times rights at the purpose of 10 years. Current earning is $4/share (E0=4). Earning with extend at a trounce of 21% during the coercionemost year, and extricate by 3% entire year during the coercionthcoming 4 years reaching 9% in year 5. The extendth trounce obtain hold to be 9% coercion the cherishing 5 years. a. Use the thoroughly rights and dividpurpose mould to indicate the current…

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