Keyes Corporation preferred stock pays an annual dividend of $5 per share. Which of the following statements is true for an investor with a required return of 8%? Select one: a. The value of the preferred stock is $4 per share because of the 8% required return b. The value of the preferred stock is $5 because the dividend is fixed at $5 each year C. The value of the preferred stock is $62.50 per share d. The value of the preferred stock is $40.00 per share Two investors are considering the purchase of Corporation XYZ bonds. The bonds are selling at a price of $1,100 each. Investor A decides to buy the bonds and Investor B does not buy the bonds. Select one: a. The yield to maturity for Investor A must be higher than the yield to maturity for Investor B. On b. The yield to maturity for this bond must be higher than the coupon rate. C. The yield to maturity for Investor A must be less than the yield to maturity for Investor B. d. Investor A must have a required return lower than the required return for Investor B. Market efficiency implies which of the following? Select one: a. market value = intrinsic value b. liquidation value = book value c. book value = market value d. book value = intrinsic value You are considering the purchase of a common stock that paid a dividend of $1.00 yesterday. You expect this stock to have a growth rate of 20 percent for the next 3 years, resulting in dividends of D1=$1.20, D2=$1.44, and D3=$1.73. The long-run normal growth rate after year 3 is expected to be 8 percent (that is, a constant growth rate after year 3 of 8% per year forever). If you require a 12 percent rate of return, how much should you be willing to pay for this stock? n Select one: a. $ 7.24 b. $24.89 C. $36.73 d. $38.65