A 9% APR with semi-annual compounding is closest to which of the following?

Select one:

a.EAR of 9.31%

b.EAR of 9.00%

c.EAR of 9.2%

d.EAR of 9.42%

Clear my choice

Question35

VBC Ltd has just paid a $1.50 dividend today. If you expect VBC's dividend to grow by 6.5% per year forever and VBC's cost of equity is 12.5%, then the value of a share of VBC is closest to:

Select one:

a.$23.08

b.$26.63

c.$12

d.$25

Clear my choice

Question36

Luther Industries needs to raise funds for a new office complex. The company plans on issuing 10-year bonds with a face value of $1,000 and a coupon rate of 7.0% (annual payments). The YTM for similar 10-year corporate bonds of various credit ratings are as follows; AAA:6.85%, AA:7%, A:7.25%, BBB:7.75%, BB:8.5%. Assuming that Luther's bonds receive a A rating, the price of bonds will be:

Select one:

a.$1,000

b.$949.1

c.$901.58

d.$982.64