52. Moerdyk Corporation's bonds have a 15-year maturity, a 7.25 % semiannual coupon, and a par value of $1,000. The going interest rate (ra) is 6.20 % , based on semiannual compounding. What is the bond's price? a. $1,047.19 b. $1,074.05 c. S1,101.58 d. $1,129.12 e. $1,157.35 53. The preemptive right is important to shareholders because it a. allows managers to buy additional shares below the current market price. b. will result in higher dividends per share. c. is included in every corporate charter. d. protects the current shareholders against a dilution of their ownership interests. e, protects bondholders, and thus enables the firm to issue debt with a relatively low interest rate. 54. A stock is expected to pay a year-end dividend of $2.00, i.e., DI $2.00. The dividend is expected to decline at a rate of 5 % a year forever (g required a. The company's current stock price is $20. -5 % ) . If the company is in equilibrium and its expected and rate of return is 15 %, which of the following statements is CORRECT? b. The company's dividend yield 5 years from now is expected to be 10% . rate is negative. c. The constant growth model cannot be used because the growth d. The company's expected capital gains yield is 5 %. at the beginning of next year is $9.50. e. The company's expected stock price 55. Stocks X and Y have the following data. Assuming the stock market is efficient and the stocks are in equilibrium, which of the following statements is CORRECT? X Y $25 Price $25 Expected dividend yield 5% 3% Required return 12% 10% a. Stock Y pays a higher dividend per share than Stock X b. Stock X pays a higher dividend per share than Stock Y c. One year from now, Stock X should have the higher price. d. Stock Y has a lower expected growth rate than Stock X e. Stock Y has the higher expected capital gains yield. 56. The required returns of Stocks X and Y are rx 10 % and ry - 12 % . Which of the following statements is CORRECT? a. If the market is in equilibrium, and if Stock Y has the lower expected dividend yield, then it must have the higher expected growth rate. b. If Stock Y and Stock X have the same dividend yield, then Stock Y must have a lower expected capital gains yield than Stock X. c. If Stock X and Stock Y have the same current dividend and the same expected dividend growth rate, then Stock Y must sell for a higher price. d. The stocks must sell for the same price e. Stock Y must have a higher dividend yield than Stock X. 57. Stocks X and Y have the following data. Assuming the stock market is efficient and the stocks are in equilibrium, which of the following statements is CORRECT? Y Price $30 $30 Expected growth (constant) 4 % 6% Required return 12% 10% a. Stock X has a higher dividend yield than Stock Y. b. Stock Y has a higher dividend yield than Stock X. c. One year from now, Stock X's price is expected to be higher than Stock Y's price. d. Stock X has the higher expected year-end dividend. e. Stock Y has a higher capital gains yield. 58. Mooradian Corporation's free cash flow during the just-ended year (t 0) was $150 million, and its FCF is expected to grow at constant rate of 5.0 % in the future. If the weighted average cost of capital is 12.5%, what is the firm's total corporate value, in millions? a. $1,895 b. $1,995 c. $2,100 d. $2,205 e. $2,315 59. Schnusenberg Corporation just paid a dividend of Do $0.75 per share, and that dividend is expected to grow at a constant rate of 6.50% per year in the future. The company's beta is 1.25, the required return on the market is 10.50 % , and the risk-free rate is 4.50%. What is the company's current stock price? a. $14,52 b. $14.89 c. $15.26 d. $15.64 e. $16.03 60. Sorenson Corp.'s expected year-end dividend is Dj$1.60, its required return is rs 11.00 % , its dividend yield is 6.00% , and its growth rate is expected to be constant in the future. What is Sorenson's expected stock price in 7 years, i.e., what is the stock price seven years from today? a. $37.52 b. $39.40 c. $41.37 d. $43,44 e. $45.61