G. A firm has an issue of $1,000 par value bonds with a 12 peroent stated interest rte outstanding. The issue pays interest anally and has 10 years remaining to its mauity date. I bonds of similar risk are currently earming 8 percent, the firm's bond will sell for today. A) $1,000 B) $805.20 C) $1,115.50 D) $1,268.40 17. The price of a bond with a fixed coupon rate and the required return have a relationship that is best described as A) perfect posltive correlation B) constant )direct D) inverse 8 If the required retum is less than the coupon rate, a bond will sell at A) par B) a discount C) a premium D) book value What is the approximate yield to maturity for a $1,000 par value bond selling for $1,120 that matures in 6 years and pays 12 percent interest annually? A) 8.5 percent B) 9.3 percent C) 12.0 percent D) 13.2 percent 19 Preferred stock is valued as if it were a 20. A) fixed-income obligation B) bond C) perpetuity D) common stock A firm has an issue of prefered stock outstanding that has a stated annual dividend of $4. The required retum on the preferred stoclk has been estimated to be 16 percent. The value of the preferred stock is A) $64 B) $16 C) $25 D) $50 21, A finm has an issue of prefered stock outstanding that has a par value of $100 and a 4% dividend. If the current market price of the preferred stock is $50, the yield on the preferred stock 22. is A) 4.00% B) 6.00% C)8.00% D) 12.00% Enmy Lou, Inc. has an expected dividend next year of $5.60 per share, a growth rate of 23 dividends of 10 percent, and a required return of 20 percent. The value of a share of Emmy Lou, Inc.'s common stock is A) $28.00 B) $56.00 C) $22.40 D) $18.67 G. A firm has an issue of $1,000 par value bonds with a 12 peroent stated interest rte outstanding. The issue pays interest anally and has 10 years remaining to its mauity date. I bonds of similar risk are currently earming 8 percent, the firm's bond will sell for today. A) $1,000 B) $805.20 C) $1,115.50 D) $1,268.40 17. The price of a bond with a fixed coupon rate and the required return have a relationship that is best described as A) perfect posltive correlation B) constant )direct D) inverse 8 If the required retum is less than the coupon rate, a bond will sell at A) par B) a discount C) a premium D) book value What is the approximate yield to maturity for a $1,000 par value bond selling for $1,120 that matures in 6 years and pays 12 percent interest annually? A) 8.5 percent B) 9.3 percent C) 12.0 percent D) 13.2 percent 19 Preferred stock is valued as if it were a 20. A) fixed-income obligation B) bond C) perpetuity D) common stock A firm has an issue of prefered stock outstanding that has a stated annual dividend of $4. The required retum on the preferred stoclk has been estimated to be 16 percent. The value of the preferred stock is A) $64 B) $16 C) $25 D) $50 21, A finm has an issue of prefered stock outstanding that has a par value of $100 and a 4% dividend. If the current market price of the preferred stock is $50, the yield on the preferred stock 22. is A) 4.00% B) 6.00% C)8.00% D) 12.00% Enmy Lou, Inc. has an expected dividend next year of $5.60 per share, a growth rate of 23 dividends of 10 percent, and a required return of 20 percent. The value of a share of Emmy Lou, Inc.'s common stock is A) $28.00 B) $56.00 C) $22.40 D) $18.67
