33. A preferred stock pays dividend $8/year, and the required rate of return is 6 percent. The value (fair market price) of the preferred stock should be a. $150 b. $145 c. $133 d. $125 34. Elizabeth Taylor is considering a bond investment. The $1,000 bonds have an annual coupon interest rate of 6 percent and the interest is paid semiannually. The yield to maturity on the bonds is 8 percent annual interest rate. There are 5 years remaining until maturity. Compute the price of the bond based on the semiannual compounding? Choose the closest number. a. $950 b. $919 c. $1200 d. $1000 35. BuzzSci will pay a common stock dividend of $2.80 at the end of the coming year. The required rate of return by common stockholders is 14 percent, and the firm has a constant growth rate of 9 percent, what is the current price of the common stock? Choose the closest number. a. $32 b. $46 c. $64 d. $56 37. If the risk-free rate is 7 percent, the expected return on the market is 10 percent, and the expected return on Security Wow is 13 percent, what is the beta of Security Wow? a. 1.0 b. 1.5 c. 2.0 d. 2.5 e. 3.0 38. If a group of securities are correctly priced, then the reward-to-risk ratio: a. for the entire group must equal 1.0. b. for each security must equal 1.0 c. for each security must equal 0. d. is equal for each security e. of the combined group is equal to that of a risk-free security. 39. The 9 percent annual coupon bonds of the Lennway Inc. are selling for $1,008.20. The bonds have a face value of $1,000 and mature in 11 years. What is the yield to maturity? a. 8.76 percent b. 8.82 percent c. 8.88 percent d. 9.03 percent e. 9.18 percent