R THE FOLLOWING MULTIPLE CHOICE QUESTIONS: [MARK THE MOST APPROPRIATE Which of the following rated bonds have the least rik? Bond rating is mainly ANSWER ,4 a measure of rate risk b. re-investment rate risk c. market risk d. default risk )e none of the above 7% cupon bond that pays interest annually is currently selling for $1,101 then, its yed to maturity is 6-year, The face value of the bond is $1,000] [approximately a. 5.0%) b 63%c.96% d. 10.7% e, none of the given ones 4. If the dividends on a preferred stock is S450 per year and the required rate of return on the stock s 9%, then the price of the preferred stock is a. $4.50 b S4050 d.$90 e none of the given ones 5. The current market price of a share of common stock is $31.50. The most recent dividend paid on stock is $4.00 [Ds]. The dividends are expected to grow at a constant rate of 5% per year for ever. The required rate of return on the com Then the following is true according to the dividend growth modet c.the stock is correctly priced a. the stock is unde b. the stock is overpriced A share of common stock has an expected longrun constant dividend growth rate of 9%, and the dividend expected to be D1] $300. The required rate of return on the common stock is 16%. The common stock is seling for S45/share Then, acco growth model, the stock is: overpriced b. underpriced ccorrectly priced Company X is expected to pay an year-end dividend of $8 a share of its common stock. After the dividend payment the stock is expected to sell at $100 per share. The required rate of return on the common stocks 8%. Then the current price of the stock is: (one period investment) CS100 $110 b, $120 dS90 e, none of the given ones a. Company A is expected to pay an year-end dividend of $8 per share of its common stock. The current price of the stock is $100. After the dividend payment the stock is expected to sell at $110 per share. Then the dividend yield on the stock is: (one period investment) 8. a. 10% b, 20% ( C. 8%) d 18% e, none of the given ones 9. Company A is expected to pay an year-end dividend of $8 per share of its common stock The current price of the stock is $100. After the dividend payment the stock is expected to sell at $110 per share Then the capital gains yield on the stock is: (one period investment) 10%) b 20% c8% d, 18% none of the given ones e 10. The following cash flows are given for the Project X Co C1 C2 C3 -$8000 +$3,000 +$5,000 +$6,000 The payback period for the project (X) is: a. zero years b. one year two years d three years e. none of the given values