1. A discount bond:

a.

Has a coupon rate which is greater than the yield to maturity.

b.

Is selling for more than face value.

c.

Has a par value which is less than the market value.

d.

Has a coupon rate which is less than the market rate of interest.

e.

Is the name given to a bond that has been called prior to maturity.

2. A stock sells for $10.92 a share and has a required return of 10 percent. Dividends are paid annually and increase at a constant 4 percent per year. What is the amount of the last dividend paid?

a.

$0.46

b.

$0.50

c.

$0.63

d.

$0.72

e.

$0.59