1. What is the current price (P₀) of preferred stock that has a par value of $100, an annual dividend yield of 6%, and a return (r_P) of 5%?

$120 $100 $80 $60

2. What is the current price (P₀) of a zero growth stock that has a D₁ of $2 and a rate of return (r_S) of 5%?

Group of answer choices

$40 $4 $20 $0

3. A $1,000 par value bond has an 8% coupon rate (paid annually). It has 5 years remaining to maturity. If the current market interest rate is 6%, what should be the current price of this bond?

$1,268.40 $918.89 $1,000 $1,084.25

4. What is the price of a constant growth stock at year 2 (P₂) that has a year 3 dividend (D₃) of $5, a growth rate (g) of 3%, and a rate of return (r_S) of 13%?

Group of answer choices

$30 $50 $60 $40