1. A fourteen-year bond, with par value equals $1,000, pays 12% annually. If similar bonds are currently yielding 10% annually, what is the market value of the bond? Use semi-annual analysis. Use Appendix B and Appendix D. (Round "PV Factors" to 3 decimal places, intermediate calculations and final answer to 2 decimal places.)

$1,448.88 $1,098.88 $1,148.88 $1,298.88

2. A 18-year zero-coupon bond was issued with a $1000 par value to yield 13. What is the approximate market value of the bond? Use Appendix B. (Round "PV Factor" to 3 decimal places and final answer to the nearest dollar amount.)

$111 $222 $166 $83

3. What is the approximate yield to maturity for a 12-year bond that pays 10 interest on a $1000 face value annually if the bond sells for $950? (Do not round intermediate calculations.)

10.25 10.75 11.75 12.25

4. An issue of preferred stock is paying an annual dividend of $1.50. The growth rate for the firm's common stock is 7%. What is the preferred stock price if the required rate of return is 10%? (Round your answer to 2 decimal places.)

$15.00 $20.00 $17.50 $12.50

5. An issue of common stock's most recent dividend is $3.95. Its growth rate is 5.0%. What is its price if the market's rate of return is 9.3%? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

$101.86 $96.86 $96.45 $45.93

6. If expected dividends grow at 9% and the appropriate discount rate is 12%, what is the value of a stock with an expected dividend of $3.15? (Round your answer to 2 decimal places.)

$157.50 $106.00 $52.50 $105.00

7. The coupon rate on a debt issue is 7%. If the yield to maturity on the debt is 8%, what is the after-tax cost of debt in the weighted average cost of capital if the firm's tax rate is 32%? (Round your answer to 2 decimal places.)

4.09% 6.79% 5.44% 7.59%

8. The coupon rate on an issue of debt is 11%. The yield to maturity on this issue is 10%. The corporate tax rate is 38%. What would be the approximate after-tax cost of debt for a new issue of bonds? (Round your answer to 2 decimal places.)

4.85% 8.35% 6.20% 7.65%

9. Tobin's Barbeque has a bank loan at 9% interest and an after-tax cost of debt of 5%. What will the after-tax cost of debt be when the loan is due if a new loan is taken out yielding 13%. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

7.22% 12.27% 4.67% none of these

10. A firm is paying an annual dividend of $3.00 for its preferred stock which is selling for $66.00. There is a selling cost of $2.00. What is the after-tax cost of preferred stock if the firm's tax rate is 39%? (Round your answer to 2 decimal places.)

3.34% 4.69% 6.14% 6.84%

11. Firm X has a tax rate of 30%. The price of its new preferred stock is $70 and its flotation cost is $4.00. The cost of new preferred stock is 12%. What is the firm's dividend? (Round your answer to 2 decimal places.)

$7.92 $9.37 $10.07 $6.57

12. A firm's preferred stock pays an annual dividend of $8, and the stock sells for $79. Flotation costs for new issuances of preferred stock are 3% of the stock value. What is the after-tax cost of preferred stock if the firm's tax rate is 31%? (Round your answer to 2 decimal places.)

10.44 11.89 12.59 9.09

13. Expected cash dividends are $4.00, the dividend yield is 6%, flotation costs are 7% of price, and the growth rate is 2%. Compute cost of new common stock. (Do not round intermediate calculations. Round your answer to 2 decimal places.) 10.55% 8.20% 9.45% 8.45%

14. A firm's stock is selling for $88. The next annual dividend is expected to be $3.00. The growth rate is 6%. The flotation cost is $4. What is the cost of retained earnings? (Round your answer to 2 decimal places.)

10.86% 7.26% 8.06% 9.41%