8-23. (Prefared stockholder expected refurn) You own 200 shares of Shapard Reomse preferred stock, which currently sells for $40 per share and pays annual dividersition $3.40 per share. a. What is your expected return? b. If you require an 8 percent return, given the current price, should you tht buy more stock? 7-9. (Bond valuation) National Steel's 15 -year, $1,000 par value bonds pay 5.5 percent interest annually. The market price of the bonds is $1,085, and your required rate of return is 7 percent. a. Compute the bond's expected rate of return. b. Determine the value of the bond to you given your required rate of return. c. Should you purchase the bond? 7-15. (Bond valuation) Xerox issued bonds that pay $67.50 in interest each year and will mature in 5 years. You are thinking about purchasing the bonds. You have decided that you would need to receive a 5 percent return on your investment. What is the value of the bond to you, first assuming that the interest is paid annually and then semiannually? 8-10. (Common stock voluation) The dividend policy of Scorpio Inc. has been recently changed to payout 40 percent of its earnings to shareholders. The company has just paid dividends of $3 per share. a. Calculate the growth rate of dividends if the return on equity is 12 percent. b. Calculate the cost of equity capital if the market price of Scorpio Inc's shares is $50. c. Would you invest in this company if your required rate of return is 18 percent? Why? 8-23. (Prefared stockholder expected refurn) You own 200 shares of Shapard Reomse preferred stock, which currently sells for $40 per share and pays annual dividersition $3.40 per share. a. What is your expected return? b. If you require an 8 percent return, given the current price, should you tht buy more stock? 7-9. (Bond valuation) National Steel's 15 -year, $1,000 par value bonds pay 5.5 percent interest annually. The market price of the bonds is $1,085, and your required rate of return is 7 percent. a. Compute the bond's expected rate of return. b. Determine the value of the bond to you given your required rate of return. c. Should you purchase the bond? 7-15. (Bond valuation) Xerox issued bonds that pay $67.50 in interest each year and will mature in 5 years. You are thinking about purchasing the bonds. You have decided that you would need to receive a 5 percent return on your investment. What is the value of the bond to you, first assuming that the interest is paid annually and then semiannually? 8-10. (Common stock voluation) The dividend policy of Scorpio Inc. has been recently changed to payout 40 percent of its earnings to shareholders. The company has just paid dividends of $3 per share. a. Calculate the growth rate of dividends if the return on equity is 12 percent. b. Calculate the cost of equity capital if the market price of Scorpio Inc's shares is $50. c. Would you invest in this company if your required rate of return is 18 percent? Why