1. Smirnoff Inc. (symbol SMNF) is expected to pay a dividend of $2.00 per share while Southern Comfort Inc (Symbol SOCO) just paid dividends of $3.70 per share. Assume that the growth rate for both are 11.5% for ever. The rate of return for SMNF is 20% while the rate of return for SOCO is 18% Calculate Po:

A. Po for SMNF is $22 Po for SOCO is $58

B. Po for SMNF is $22 Po for SOCO is $60.9

C. Po for SMNF is $23.5 Po for SOCO is $56.923

D. Po for SMNF is $23.5 Po for SOCO is $63.5

E. None of the above.

2. A bond with a 5 percent coupon that pays interest semiannually and is priced at par will have a market price of _____ and interest payments in the amount of _____ each.

A. $1,005; $50

B. $1,050; $25

C. $1,050; $50

D. $1,000; $50

E. $1,000; $25

3. The ELL common stock pays an annual dividend of $1.90 a share and is committed to maintaining a constant dividend. How much are you willing to pay for one share of this stock if your required return is 11 percent?

A. $15.56

B. $16.67

C. $17.27

D. $18.88

E. $20.00

4. The Rose Shoppe offers 10-year, 8 percent coupon bonds with semiannual payments and a yield to maturity of 8.24 percent. What is the market price of a $1,000 face value bond?

A. $990.32

B. $983.86

C. $1,108.16

D. $1,521.75

E. $591.04

5. Antonio's offers a 10-year bond that has a coupon rate of 5 percent and semiannual payments. The face value is $1,000 and the yield to maturity is 12.6 percent. What is the current value of this bond?

A. $273.09

B. $580.92

C. $574.56

D. $605.92

E. $854.46

6. A General Co. bond has a coupon rate of 7 percent and pays interest annually. The face value is $1,000 and the current market price is $1,020.50. The bond matures in 20 years. What is the yield to maturity?

A. 6.59%

B. 6.81%

C. 7.00%

D. 7.04%

E. 7.12%

7. Webster's has a 12-year bond issue outstanding that pays a coupon rate of 6.5 percent. The bond is currently priced at $938.76 and has a par value of $1,000. Interest is paid semiannually. What is the yield to maturity?

A. 7.27%

B. 7.80%

C. 8.01%

D. 14.56%

E. 14.07%

8. Your firm offers a 20-year, semiannual coupon bond with a yield to maturity of 8.35 percent, a face value of $1,000, and a market price of $1,054. What is the coupon rate?

A. 8.91%

B. 4.46%

C. 17.64%

D. 8.82%

E. 17.82%

9. Bin Restaurant Corp stock has a market price of $18. If it has a yearly dividend of $2.50, what is your expected rate of return if you purchase the stock at its market price?

a. .072%

b. 7.2%

c. 13.89%

d. 15.15%

10. Your father bought 100 shares of john deeres common stock in 1982 for $1.45. He sold it in 2011 at $72.23. What is the rate of return he earned on this investment?

A. 2000%

B. 3000%

C. 4881%

D. 5880%

E. 0%