Your broker faxed to you the following information about two semiannual coupon bonds that you are considering as a potential investment. Unfortunately, your fax machine is blurring some of the items, and all you can read from the fax on the two different bonds is the following:

Features	IBM Coupon Bond	AOL Coupon Bond
Face value (par)	$1,000	$1,000
Coupon rate	9.5%
Yield to maturity	7.5%	9.5%
Years to maturity	10	20
Price		$689.14

Fill in the missing data from the information that the broker sent.

For a discount bond, the current yield is __ the coupon rate, and the coupon rate is _____ the yield to maturity.

less than; less than

less than; greater than

greater than; less than

greater than; greater than

Cannons Corporation will pay a $4.00 per share dividend next year. The company pledges to increase its dividend by 4 percent per year, indefinitely. If you require a 13 percent return on your investment, how much will you pay for the companys stock today?

Shocking Co. is expected to maintain a constant 7 percent growth rate in its dividends, indefinitely. If the company has a dividend yield of 4.2 percent, what is the required return on the power companys stock?