Which of the following is most likely to indicate a problem with a company's performance? 1) A year-over-year increase in operating expenses on the income statement 2) A year-over-year increase in operating expenses on a common-sized income statement 3) A year-over-year decrease in operating expenses on a common-sized income statement 4) A year-over-year decrease in operating expenses on the income statement 5) None of the above are a cause for concern. Caspian Sea Drinks just paid a dividend of $4.25 (i.e., DO = 4.25). The dividend is expected to grow at a constant rate of 3.47% forever and the required rate of return is 14.18%. What is the value of the stock? 1) $41.06 2) $46.88 3) $30.12 4) $33.93 5) $50.49 6) None of the answers in this list is within $0.20 of the correct answer. G-Dawg, Inc. plans to issue a $5000 par value bond that will mature exactly 17 years from today. The bond will have a coupon rate of 8.86%, and it will make quarterly (i.e., 4 times per year) coupon payments. If the yield to maturity for the bond is 7.48%, what will the price of the bond be? 1) $5,530.37 2) $5,660.76 3) None of the answers in this list is within $0.20 of the correct answer. 4) $5,521.19 5) $5,533.05 6) $5,500.89 Caspian Water needs to raise $59.00 million by issuing additional shares of stock. If the market estimates Caspian Water will pay a dividend of $2.12 next year (D1 = 2.12), which will grow at 3.99% forever and the cost of equity to be 12.82%, then how many shares of stock must the firm sell? 1) None of the answers in this list is within 100 shares of the correct answer. 2) 312,890 3) 2,975,934 4) 4,128,970 5) 915,939 6) 2,457,406