1 A

The newspaper reported last week that Bennington Enterprises earned $26.5 million this year. The report also stated that the firms ROE is 15 percent. Bennington retains 85 percent of its earnings.

a. What is the firm's earnings growth rate? (Round the answer to 2 decimal places.)

Earnings growth rate %

b. What will next year's earnings be? (Enter the answer in dollars, not millions of dollars. Omit $ sign in your response.)

Next year's earnings $

1 B

Suppose the following bond quote for IOU Corporation appears in the financial pages of todays newspaper. Assume the bond has a face value of $1,000, paying semiannual coupon, and the current date is April 15, 2016. (Do not round intermediate calculations. Round the final answers to 2 decimal places.)

Company (Ticker)

Coupon

Maturity

Last Price

Last Yield

Estimated volume (in $ thousands)

IOU (IOU)

8.20

Apr 15, 2025

104.86

??

1,847

What is the YTM of the bond?

YTM %

What is the current yield?

Current yield %