| Wing Air -11.86%, Airfoil -43.43% Question 2: Cavu Air Inc., issued 15 Year bonds 2 years ago at a coupon rate of 6.40% percent. The bonds make semi annual payments. If these bonds currently sell for 105 percent of par value, what is the YTM? Settlement date | 1/1/2000 | Maturity date | 1/1/2013 | Annual coupon rate | 6.40% | Coupons per year | 2 | Face value (% of par) | 100 | Bond price (% of par) | 105 | | 5.85% Question 3: Contrail Air Inc., Just paid a dividend of $5.00 per share on its stock. The dividends are expected to grow at a constant rate of 7% percent per year, indefinitely. If investors require a return of 15% percent, what is the current price? Dividend paid | $5.00 | Dividend growth rate | 7% | Required return | 15% | Requested year | 0 | | 66.88 Question 4: Airfoil, Inc. announced yesterday that they earned $27,000,000 million this year. They also stated the firm's return on equity is 12% percent. Airfoil retains 60% percent of their earnings. What is the firms earnings growth rate? Earnings | $27,000,000 | ROE | 12% | Retention ratio | 60% | | | |