E10-7

Evans Emergency Response bonds have 5 years to maturity. Interest is paid semiannually. The bonds have a $1,000 par value and a coupon rate of 9 percent.

If the price of the bond is $1,085.55, what is the annual yield to maturity?(Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)

Annual yield to maturity= (%)

E10-8

Stagnant Iron and Steel currently pays a $9.60 annual cash dividend (D₀). They plan to maintain the dividend at this level for the foreseeable future as no future growth is anticipated.

If the required rate of return by common stockholders (K_e) is 22 percent, what is the price of the common stock?(Do not round intermediate calculations. Round your answer to 2 decimal places)

Price=

E10-9

Maxwell Communications paid a dividend of $2.15 last year. Over the next 12 months, the dividend is expected to grow at 12 percent, which is the constant growth rate for the firm (g). The new dividend after 12 months will representD₁. The required rate of return (K_e) is 22 percent.

Compute the price of the stock (P₀).(Do not round intermediate calculations. Round your answer to 2 decimal places.)

Stock Price=

E10-10

A firm pays a $4.80 dividend at the end of year one (D₁), has a stock price of $80, and a constant growth rate (g) of 5 percent.

Compute the required rate of return (K_e).(Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)

Rate of Return (%)