questions (8-11)

QUESTION 8 The bonds of Microsoft, Inc. carry a 12% coupon, have a $1,000 face value, and mature in 5 years. Bonds of equivalent risk yield 9%. Assuming coupons are paid semi-annually, what is the market value of Microsoft's bonds? A. $1.160 25 B. $1,118,69 C$1,011,20 D. $1,095.66 E $1,087 25 QUESTION 9 The lowest S&P bond rating category considered to be of investment grade" quality grade is: A BBB B. AAA . D.BB QUESTION 10 The dividend on Media Motors common stock will be $2 in 1 year, $3.50 in 2 years, and $5.00 in 3 years. You can sell the stock for $75 in 3 years. If you require a 10% return on your investment, how much would you be willing to pay for a share of this stock today? A $59.69 B. $63.65 C. $64.82 D. $65 66 E. $71 30 QUESTION 11 A stock that pays a constant dividend of $2.50 forever currently sells for $20.00. What is the required rate of return? A 11.0% B. 11.5% C 12.0% D. 12.5% E 13.0%