Question
1. Tenney Corp's earnings and per-share common stock dividends are expected to grow at a fixed rate for the foreseeable future. The company's common stock
1. Tenney Corp's earnings and per-share common stock dividends are expected to grow at a fixed rate for the foreseeable future. The company's common stock has an expected dividend yield of 6.5% and an expected capital gains yield of 3.5%. The company has just paid out a per-share dividend of $3 on its common stock. What should each share of this stock be selling for today?
a. $47.77
b. $30.00
c. $100.00
d. $31.05
e. $103.50
Four years ago, the Morgan Co. issued 15-year, 7.0 percent semiannual coupon bonds at par. Today, the bonds are currently trading for $1013. What is this firm's pretax cost of debt?
a. 7.08%
b. 6.97%
c. 6.79%
d. 7.39%
e. 6.83%
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