The common stock and debt of Sheridan Shoes are valued at $145 million and $90 million, respectively. Investors currently require a 16% return on the common stock and an 8% return on the debt. Assume that the change in capital structure does not affect the risk of the debt and that there are no taxes. If Sheridan Shoes issues an additional $50 million of common stock and uses this money to retire debt, what is the expected retum on the stock (show work for partial marks)? A 9-year maturity convertible bond with a 6% annual coupon on a company with a bond rating of AAA is selling for $1,032. Each bond can be exchanged for 50 shares, and the stock price currently is $20 per share. Other AAA-rated bonds with the same maturity would sell at a yield to maturity of 7%. What is the value of the implicit call option on the bond (show work for partial marks)? Here are the abbreviated financial statements for Planners Peanuts: Income Statement, 2015 Sales $3,040 Costs 1,960 Net income $ 1,080 Assets 2014 $4.990 Balance Sheet, Year-End 2015 $4,370 Debt Equity 2014 $1,660 3,330 2015 $1,570 2.800 Total $4.990 $4,370 Total $4.990 $4,370 It sales increase by 34% in 2016, and the company uses a percentage-of-sales planning model meaning that all items on the income and balance shoot also increase by 34%). The balancing for in this case will be dividends What will be the value of the dividends (show your work for partial marks/