A risk-free, zero-coupon bond with a face value of $1,000 has 15 years to maturity. If the YTM is 5.8%, which of the following would be closest to the price this bond will trade at? A) $686 B) $525 C) $721 D) $429 Which of the following best defines incremental earnings? A) the net present value (NPV) of earnings that a firm is expected to receive as the result of an investment decision B) the amount by which a firm's earnings are expected to change as the result of an investment decision. C) the earnings arising from all projects that a company plans to undertake in a fixed timespan. D) cash flows arising from a particular investment decision Jumbo Transport, an air-cargo company, expects to have earnings per share of $2.50 in the coming year. It decides to retain 20% of these earnings in order to lease new aircraft. The return on this investment will be 25%. If its equity cost of capital is 12%, what is the expected share price of Jumbo Transport? A) $16.67 B) $24.75 C) $28.57 D) $19.23 OwenInc has a current stock price of $14.50 and is expected to pay a $0.85 dividend in one 19 year. If Owen Inc's equity cost of capital is 12%, what price would OwenInc's stock be expected to sell for immediately after it pays the dividend? A) $15.39 B) $13.65 C) $12.18 D) $15.29