In order to accurately assess the capital structure of a firm, it is necessary to convert its balance sheet figures to a market value basis. KJM Corporation's balance sheet as of today is as follows: Long-term debt (bonds, at par) $10,000,000 Preferred stock2,000,000 Common stock ($10 par) 10,000,000 Retained earnings 4,000,000 Total debt and equity $26,000,000 The bonds have a 4.0% coupon rate, payable semiannually, and a par value of $1,000. They mature exactly 10 years from today. The yield to maturity is 12%, so the bonds now sell below par. What is the current market value of the firm's debt?

Stock X has the following data.

Assuming

the stock market is efficient and the stock is in equilibrium, which of the following

statements is CORRECT?

Expected dividend, D

1

$3.00

Current Price, P

0

$50

Expected

constant growth rate

6.0%

a.

The stock's

required

return is 10%.

b.

The stock's

expected

dividend yield and growth rate are equal.

c.

The stock's

expected

dividend yield is 5%.

d.

The stock's

expected

capital gains yield is 5%.

e.

The stock's

expected

price 10 years from now is $100.00.