Butler Corp paid a dividend today of $3.50 per share. The dividend is expected to grow at a constant rate of 8% per year. If Butler Corp stock is selling for $75.60 per share, the stockholders' expected rate of retum is Select one: O a. 13.00% b. 14.38% c. 12.63% d. 12.53% If two firms have the same current dividend and the same expected growth rate, their stocks must sell at the same current price or else the market will not be in equilibrium. Select one: a. True if markets are semi-strong form efficient b. True if investors are risk-averse c. True d. False b. All of the following will cause the value of a bond to increase, other things held the same, except: Select one: o a. the bond is convertible into the company's common stock b. investors' required rate of return increases c. interest rates decrease d. the company's debt rating drops from AAA to BBB Aiden A small biotechnology research corporation has been experiencing losses for the first three years of its existence, and thus has a negative balance in retained earnings. The corporation's stock price, however, is $1 per share. Which of the following statements is most correct? Select one: a. The corporation's accountants must have made a mistake because retained earnings may not be negative. ob. Investors are irrational to pay $1 per share when earnings per share have been negative for three years. oc. Investors believe the stock is worth $1 per share because future earnings (and cash flows) are expected to be positive. d. The required return on the stock will be small because the company has very few assets. Aaron Corporation has two bonds outstanding. Both bonds mature in 10 years, have a face value of $1,000, and have a yield to maturity of 8%. One bond is a zero coupon bond and the other bond has a coupon rate of 8%. Which of the following statements is true? Select one: a. Both bonds must sell for the same price if markets are in equilibrium b. The zero coupon bond must have a higher price because of its greater capital gain potential. c. All rational investors will prefer the 8% bond because it pays more interest. d. The zero coupon bond must sell for a lower price than the bond with an 8% coupon rate