1.CMS Corporation's balance sheet as of today is as follows:

Long-term debt (bonds, at par) $10,000,000

Preferred stock 2,000,000

Common stock ($10 par) 10,000,000

Retained earnings 4,000,000

Total debt and equity $26,000,000

The bonds have a 3.8% coupon rate, payable semiannually, and a par value of $1,000. They mature exactly 10 years from today. The yield to maturity is 12%, so the bonds now sell below par. What is the current market value of the firm's debt?

Select the correct answer.

a. $5,297,332 b. $5,296,490 c. $5,295,648 d. $5,299,016 e. $5,298,174

2.Haswell Enterprises' bonds have a 10-year maturity, a 6.25% semiannual coupon, and a par value of $1,000. The going interest rate (rd) is 5.25%, based on semiannual compounding. What is the bond's price?

Select the correct answer.

a. $1,082.59 b. $1,079.81 c. $1,085.37 d. $1,088.15 e. $1,077.03

3.A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return is rs= 10.5%, and the expected constant growth rate is g = 8%. What is the stock's current price?

Select the correct answer.

a. $30.93 b. $30.00 c. $27.21 d. $29.07 e. $28.14

4.A stock just paid a dividend of D0= $1.50. The required rate of return is rs= 10.5%, and the constant growth rate is g = 4.0%. What is the current stock price?

Select the correct answer.

a. $26.55 b. $27.40 c. $24.85 d. $24.00 e. $25.70