Time lett 1.55:51 If a 4% preferred stock's price is $60, what rate of return do investors require? O a. 6.67% Ob6% O c. 7% O d. 7.5% When a firm issues a bond, when the coupon rate is equal to the market rate (yield) how much capital does the firm receive? a. the sum of the coupon payments ob. the par value minus the sum of the coupon payments O C. the par value plus the sum of the coupon payments O d. par value If last year's dividend was $1 and the dividend is expected to grow at 10%, what is the dividend expected to be in 4 years? a $1.46 Ob $1.61 O c. $1.21 O d. $1.33 There is a 25% chance a stock earns 10%, a 50% chance the stock has a 2% return, and a 25% chance the stock loses 2%. What is the standard deviation of the stock? O a. 4.99% O b. 4.03% O c. 2.50% O d. 4.36% A bond rated BB would be considered: a. in default b. medium grade O c. speculative grade O d. high grade There is a 25% chance a stock earns 10%, a 50% chance the stock has a 2% return, and a 25% chance the stock loses 2%. What is the coefficient of variation of the stock? a. 1.45 O b. 1.25 O c. 0.69 O d. 0.79 What is the expected price of a 6% preferred stock with an 10% required rate of return? a. $60 O b. $100 O c. $75 O d. $80 Using the Fisher Equation, if inflation is 8% and the nominal rate of interest is 15%, what is the real rate of interest? a. 7.50% O b.7% O c. 6.48% O d. 24.2% A firm is expected to have no FCF for next year but in the following year FCF is expected to equal $85 million and grow 4% thereafter. If the firm is comprised of 60% equity and debt and the WACC is 7%, what is the total value of all equity? a. $1.050 billion O b. $1.575 billion OC. $2.625 billion O d. $1.313 billion What is the coupon payment if a bond's coupon rate is 6%, the par value is $1000 and the bond pays coupons semi-annually? a a $30 O b. $300 O C. $60 O d. $15