(Expected rate of return and current yield) Time Warner has bonds that are selling for $ 724. The coupon interest rate on the bonds is 8.85 percent and they mature in 18 years. What is the yield to maturity on the bonds? What is the current yield?

a. The yield to maturity on the bond is ______%. (Round to two decimal places.)

b. The current yield is ________%. (Round to two decimal places.)

(Common stock valuation) You intend to purchase Dorchester common stock at $52.00 per share, hold it for 1 year, and then sell it after a dividend of $6.75 is paid. How much will the stock price have to appreciate for you to satisfy your required rate of return of 17 percent? The stock price have to appreciate _________%. (Round to two decimal places.)

(Common stock valuation) Dalton Inc. has a return on equity of 13.1 percent and retains 56 percent of its earnings for reinvestment purposes. It recently paid a dividend of $3.75 and the stock is currently selling for $39.

a. What is the growth rate for Dalton Inc.?

b. What is the expected return for Dalton's stock?

c. If you require a 13 percent return, should you invest in the firm?

(Preferred stock expected return) You are planning to purchase 100 shares of preferred stock and must choose between Stock A and Stock B. Stock A pays an annual dividend of $3.50 and is currently selling for $35. Stock B pays an annual dividend of $3.30 and is selling for $37. If your required return is 9.46 percent, which stock should you choose? What is the expected return of Stock A? ________% (Round to two decimal places.)

What is the expected return of Stock B? _________% (Round to two decimal places.)

If your required return is 9.46 percent, you should choose (Stock A/Stock B)

*ONLY RESPOND IF YOU WILL ANSWER ALL QUESTIONS*