## Transcribed Text

QUESTION
2 points e Answer
Bonds issued by VIX Industries have a par value of $1,000. The
bonds are currently selling for $885.5 50. They have 10 years
remaining to maturity. The coupon rate is 8% and the coupon
payment is paid semiannually. What is the bonds yield to
maturity?
Oa.9.82%
(b.10.57%
Oc.11.39%
(d.7.26%
QUESTION 2
2 points Save Answer
WMT Enterprise has bonds with face value of $1,000 on the
market making annual payments, with 10 years to maturity, and
selling for $1,146.80. At this price, the bonds yield 6%. What
must the coupon rate be on Merton Enterprise is bonds?
Oa.6%
Ob.60
Oc.8%
O d.80
QUESTION 3
2 points Save Answer
A MU Industries bond has a 10% coupon rate and a $1,000 face
value. Interest is paid semiannually, and the bond has 15 years to
maturity. If investors require an 8% yield, what is the bond is
value?
Oa $1,172.9
Ob.$948.7
Od.$1,138.2
QUESTION
2 points Save Answer
ABC Co. has just paid a cash dividend of $2.1 per share.
Investors require a 16% return from investments such as this If
the dividend is expected to grow at a steady 9% per year, what is
the current value of the stock?
Oa $34.9
(b.$32.7
Oc.$36.3
O d.$30.1
QUESTION
2 points Save Answer
Following Question 4. what will the stock be worth in five years?
Oa $59.68
(b.$50.31
O° $52.25
O d.$56.73
QUESTION 6
2 points Save Answer
XYZ Corporation will pay a $4.5 per share dividend next year. The
company pledges to increase its dividend by 4% per year,
indefinitely. If you require a 10% return on your investment, how
much will you pay for the company stock today?
O $71.43
(b.$43.75
Oc.$75
Od.$41.67
QUESTION 7
1 points ve Answer
Suppose we observe a stock selling for $40 per share. The next
dividend will be $1 per share. and you think the dividend will
grow at 12% per year forever. What is the dividend yield?
Oa 14.5%
Ob.12%
Oc.2.5%
QUESTION 8
1 points Save Answer
Following Question 7. what is the capital gains yield?
Oa.12%
(b.2.5%
0° 14.5%
Od.2.8%
QUESTION
2 points Save Answer
Following Question 7. what is the total required return?
Oa 14.5%
(b.2.5%
c.2.8%
Od.14.8%
QUESTION 10
2 points Save Answer
TXN. Inc. has an issue of preferred stock outstanding that pays a
$6.3 dividend every year, in perpetuity. If this issue currently sells
for $78.86 per share, what is the required return?
Oa 74.86%
Ob.7.42%
Oo 79.89%
Od.7.99%
QUESTION 11
2 points Save Answer
BGN, Inc. just paid a dividend of $4. The dividend is expected to
grow at a 30% rate for the next 3 years and at a 10% rate
thereafter. What is the value of the stock if the required rate of
return 20%?
Oa $70.06
b.$87.60
Oc.$75.31
O d.$84.92

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