Bergenfield, Inc., is expected to pay a dividend of $4 in the upcoming year. Dividends are expected to grow at the rate of 9% per year. The risk-free rate of return is 5%, and the expected return on the market portfolio is 20%. The stock of Bergenfield, Inc., has a beta of 0.80. Using the constant-growth DDM, the intrinsic value of the stock is _________.

A supply-side economist would likely agree with which of the following statements?

Multiple Choice

• Real income will rise when government expenditures and tax rates increase.

• Increasing the money supply will increase real output without causing higher inflation.

• Real output and aggregate employment are primarily determined by tax rates.

• Real output and aggregate employment are primarily determined by aggregate demand.

You buy an 9-year $1,000 par value bond today that has a 6.50% yield and a 6.50% annual payment coupon. In 1 year promised yields have risen to 7.50%. Your 1-year holding-period return was ___.