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1.Question- Bond Valuation ABC Health Med, has a $1,000 par value bond with an 8 percent rate outstanding. The bond has 12 years remaining to it maturity date. If interest is paid semiannual interest, what is the value of the bond when the required return is 8 percent. Show all work. ,,2.Question – Solve this example – and show your work: ABC Health Care Center, a growing health care organization, wishes to determine the required return on an asset- asset X that has a beta of 1.0 The risk-free rate of return is found to be 6 percent; the return on the market portfolio of assets is 11 percent.,,,,3. Corporate finance A3 Bond valuation) General Electric made a coupon payment yesterday on its 6.75% bonds that mature in 8.5 years. If the required return on these bonds is 8% APR, what should be the market price of these bonds? ,, ,,4. Corporate finance A13. (Required return for a preferred stock) Sony $4.50 preferred is selling for $65.50. The preferred dividend is nongrowing. What is the required return on Sony preferred stock? ,, ,,5. A15. (Stock valuation) Let’s say the Mill Due Corporation is expected to pay a dividend of $5.00 per year on its common stock forever into the future. It has no growth prospects whatsoever. If the required return on Mill Due’s common stock is 14%, what is a share worth? ,, ,,6. chapter 7 corporate B12. (CAPM) Owego Storage and Housing, Inc., is considering building a new warehouse in Endicott, New York. Owego Storage has 2 million common shares outstanding. The share price is $11. Assume rf = 4.5%, ß = 0.75, and rM – rf = 11.5%. Estimate Owego Storage’s required return on its equity investment in the new warehouse. ,, ,,7 problem 4 Essential of health care finance 4. A home health care firm has purchased five automobiles. Each automobile costs $24,000 and has an estimated useful life of three years. Each year, the replacement cost of the automobiles is expected to increase ten percent. At the end of the third year, the replacement cost would be $31,944 per vehicle. The firm anticipates that each automobile will be used to make 1500 patient visits per year. If the firm prices each visit to recover just the historical cost of the automobiles, it will include a capital cost of $5.33 per visit ($24,000 divided by 4500 total visits). Assuming the revenue generated from this capital charge is invested at ten percent, will the firm have enough funds available to meet its replacement cost? How would this situation change if price level depreciation were used to establish the capital charge? ,, ,,8. Chapter 10 essential of health care finance: problem 5 4. You have been reviewing documentation in your medical records department for the last week and have discovered a potential issue with respect to documentation for DRG 127 (heart failure and shock) and DRG 475 (respiratory system diagnosis with ventilator support). You have discovered 20 cases that were coded as DRG 127, when in fact these patients had been put on a ventilator. These patients also had a respiratory system diagnosis. If the respiratory system diagnosis had been the principal diagnosis, these patients would have been coded as DRG 475. If the hospital’s base payment rate for a case weight of 1.000 is $5,000, determine the incremental payment the hospital would have received. Assume the case weight for DRG 127 is 1.000 and 3.700 for DRG 475. ,