(Bond valuation) NationalSteel's 15-year, $1,000 par value bonds pay 11percent interest annually. The market price of the bonds is $775 and your required rate of return is 16percent.

a. Compute thebond's expected rate of return.

b. Determine the value of the bond toyou, given your required rate of return.

c. Should you purchase thebond?

a. What is the expected rate of return of thebond?

14.81% (Round to two decimalplaces.)

b. What is the value of the bond toyou, given your 16

16 percent required rate ofreturn? $(Round to the nearestcent.)

2) (Common stock valuation) Dalton Inc. has a return on equity of 11.1 percent and retains 58 percent of its earnings for reinvestment purposes. It recently paid a dividend of $3.25 and the stock is currently selling for $39

a. What is the growth rate for DaltonInc.?

b. What is the expected return forDalton's stock?

c. If you require a 13 percentreturn, should you invest in thefirm?

a. What is the growth rate for DaltonInc.?

6.44 % (Round to two decimalplaces.)

b. What is the expected return forDalton's stock?___ (Round to two decimalplaces.)

3) (Common stockholder expected return) Alyward& Bram common stock currently sells for $ 24.25 per share. Thecompany's executives anticipate a constant growth rate of 8.9 percent and anend-of-year dividend of $ 2.75

a. What is your expected rate ofreturn?

b. If you require a return of 18 percent, should you purchase thestock? (Round to two decimalplaces.)

a. If you buy the stock for $ 24.25 your expected rate of return is ____(Round to two decimalplaces.)