4. Exxon Mobil (XOM) Preferred Stock has a par value of $100 and pays a fixed annual dividend of 3%. Because of lower inflation, the market's required yield on this preferred stock has gone from12% to 10%. As a result, the value of XOM preferred stock

a. Decreased by $3

b. Increased by $3

c. Decreased by $5

d. Increased by $5

e. None of the above

5. Two projects are independent if:

a. the acceptance of one means rejection of the other

b. both have a positive NPV

c. selection of one project does not mean rejection of the other project (both projects can be selected)

d. one has a positive NPV and one has a negative NPV

e. the IRR and the NPV give conflicting results

6. Herman Miller will adjust its WACC from 11% to 15%. Which one of the following is true regarding the new capital assessment?

a. Herman Millers IRR will change

b. Herman Millers NPV will not change

c. Herman Millers payback will change

d. Herman Millers Discounted payback will not change

e. Herman Millers MIRR will change