Assume a bond's stated rate is 5% and the yield to maturity is 6%, will the bonds sell for par value, above par value, or below par value?Below par valuePreferred stock has a constant annual dividend payment of $20 and a price of $400. What is the required rate of return?5A $500,000, 10 year bond has a stated rate of 8% and sells for $520,000. What is the yield to maturity?Less than 8%Stockholders may be influenced by changes in earnings and other factors, but the ultimate value rests with the distribution ofearningsThe price of a $500,000, 10 year bond, with a stated rate of 10% compounding semi-annually, and a yield to maturity of 12% is $_____. (Do not include a dollar sign or commas in your answer. Round to the nearest whole dollar)Blank 1: 442650, $442650, 442650.39, $442650.39, $442,650, 442,650, or 442,650.39Common stock has a constant annual dividend of $2.00 and a required rate of return of 8%. What is the price of the common stock?25Preferred stock has a constant annual dividend payment of $20 and a required rate of return of 5%. What is the price of the preferred stock?400Which of the following formulas is used to determine the required rate of return for preferred stock?Dp/PpWhich of the following formulas is used to determine the price of common stock with constant growth in dividends?D1/Ke-gThe value of a share of common stock may be interpreted as thepresent value of an expected stream of future dividendsWhich of the following formulas is used to determine the required rate of return given a constant growth rate?(D1/P0) + gWhich of the following formulas is used to determine the price of common stock? Assume that there is no growth in dividends.D1/KeIf a company's P/E ratio is 12 and earnings per share of stock are $4, what is the market price of the stock?48Common stock has a dividend of $2.00 at the end of the first year, a growth rate of 6%, and a required rate of return of 8%. What is the price of the common stock?100Common stock has a dividend of $2.00 at the end of the first year, a growth rate of 6%, and a price of $100. What is the required rate of return?8%Common stock has a constant annual dividend of $2.00 and a required rate of return of 8%. What is the price of the common stock?25Company A has a price-earnings ratio of 40 times and company B has a price earnings ratio of 50 times. If both companies have earnings per share of $5, which company's stock price is higher?B
