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1. What is the relationship between bond price and bond yield? a. Bond price is inversely related to its yield. b. Bond price is positively

1. What is the relationship between bond price and bond yield?

a. Bond price is inversely related to its yield.

b. Bond price is positively related to its yield.

c. Bond price reacts to its yield differently depending on whether it is a premium or discount bond.

d. Bond price is not directly related to its yield.

2. The next dividend payment by Hot Wings, Inc., will be $2.65 per share. The dividends are anticipated to maintain a 3 percent growth rate forever. If the stock currently sells for $42 per share, what is the required return?

a. 9.31%

b. 6.31%

c. 3.00%

d. 3.31%

3. Gecko Corp. is planning to pay an annual dividend of $2.08 a share on their common stock for the next period. The company adheres to a constant rate of growth dividend policy and offers a 4% growth rate in dividends. What will one share of common stock be worth ten years from now if the discount rate is 8 percent?

a. $74.01

b. $80.05

c. $59.85

d. $76.97

e. $71.16

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