1. The bonds issued by BittyBop bear a 6 percent coupon, payable semiannually. The bond matures in 8 years and has a $1,000 face value. Currently the bond sells at par. What is the yield to maturity?

2. A Binger Co. bond has an 8 percent coupon 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?

3. If a companys bond rating is changed from AAA to BBB, what happens to the yield to maturity of the companys bonds?

4. The stock of Yoder Inc. has a beta of 1.43. The risk-free rate of return is 3.6 percent and the market risk premium is 9 percent. What is the required rate of return on Yoder stock?

5. Red River Rags recently paid a $3.60 annual dividend on its common stock. This dividend increases at an average rate of 3.5 percent per year. The stock is currently selling for $62.10 a share. What is the rate of return on Red Rivers stock?

6. Sandstone Carpets just announced that its annual dividend for this coming year will be $2.42 a share and that all future dividends are expected to increase by 2.5 percent annually. What is the rate of return if this stock is currently selling for $22 a share?

7. The preferred stock of Altec Lansing pays an annual dividend of $1.70 and sells for $20.24 a share. What is the rate of return on this security?

8. Speakers Unlimited has a cost of debt of 7 percent, a cost of equity of 11 percent, and a cost of preferred stock of 8 percent. The firm has 104,000 shares of common stock outstanding at a market price of $20 a share. There are 40,000 shares of preferred stock outstanding at a market price of $34 a share. The bond issue has a total face value of $500,000 and sells at 102 percent of face value. The companys tax rate is 34 percent. What is the weighted average cost of capital for Speakers Unlimited?