A 10-year bond pays 3% on a face value of $1,000. If similar bonds are currently yielding 6%, what is the market value of the bond? Use annual analysis.

Question 1 options:

1)	Less than $800

2)	More than $800 and less than $1,200

3)	More than $1,200

4)	Not enough information is given to tell.

Save

Question 2

The growth rate for the firm's common stock is 7%. The firm's preferred stock is paying an annual dividend of $3. What is the preferred stock price if the required rate of return is 10%?

Question 2 options:

1)

$30.00

2)

$37.50

3)

$50.00

4)	None of these options

Save

Question 3

What is the value if a bond that matures in 10 years, has an annual coupon rate of 6% and a par value of $1,000? Assume a required rate of return of 12% and round your answer to the nearest $10. Assume annual interest payments.

Question 3 options:

1)

$660

2)

$990

3)

$1,443

4)

$1,000

Save

Question 4

A ten year bond pays 11% interest on a $1000 face value annually. If it currently sells for $1,195, what is its approximate yield to maturity?

Question 4 options:

1)

9%

2)

7.4%

3)

12.7%

4)	none of the above

Save

Question 5

Jim Busby calls his broker to inquire about purchasing a bond of Disk Storage Systems. His broker quotes a price of $1,180. Jim is concerned that the bond might be overpriced based on the facts involved. The $1,000 par value bond pays 14 percent interest, and it has 25 years remaining until maturity. The current yield to maturity on similar bonds is 12 percent. Compute the new price of the bond and comment on whether you think it is overpriced in the marketplace.

Question 5 options:

1)	1,157.02, overpriced

2)	1,157.02, underpriced

3)	1,184.02, overpriced

4)	1,184.02, underpriced