12. 13. The Sisyphean Company has a bond outstanding with a face value of $1000 that reaches maturity in 15 years. The bond certificate indicates that the stated coupon rate for this bond is 8% and that the coupon payments are to be made semiannually. Assuming the appropriate YTM on the Sisyphean bond is 9%, then this bond will trade at A. par. B. a discount C. a premium D. None of the above Which of the following statements is TRUE regarding profitable and unprofitable growth? A. If a firm wants to increase its share price, it must cut its dividend and invest more. B. If the firm retains more earnings, it can pay more dividends. C. When the return on new investment is lower than cost of equity capital, the optimal strategy is to pay out all earnings to shareholders. D. Cutting the firm's dividend to increase investment will raise the stock price if, and only if the return on new investments is equal to cost of equity capital. Which of the following statements is FALSE? A. The total payout model allows us to ignore the firm's choice between dividends and share repurchases. B. By repurchasing shares, the firm increases its share count, which decreases its earnings and dividends on a per-share basis. C. The total payout model discounts the total payouts that the firm makes to shareholders, which is the total amount spent on both dividends and share repurchases. D. None of the above 14