# Corporate Finance Essay

____ 2. Skylab Technologies issued 10-year bonds yesterday at their par value of $1,000. These bonds pay $60 in interest every six

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____ 16. A stock just paid a dividend of $1. The required rate of return is rs 11%, and the constant growth rate is 5%. What is the current stock price? a. | $25.00 | b. | $15.00 | c. | $17.50 | d. | $22.50 | e. | $20.00 |

____ 17. Moussawi Ltd's outstanding bonds have a $1,000 par value, and they mature in 5 years. Their yield to maturity is 9%, based on semiannual compounding, and the current market price is $853.61. What is the bond's annual coupon interest rate? a. | 5.20% | b. | 5.50% | c. | 5.40% | d. | 5.30% | e. | 5.10% |

____ 18. A share of common stock has just paid a dividend of $2.00. If the expected long-run growth rate for this stock is 7%, and if investors require a(n) 11% rate of return, what is the price of the stock? a. | $52.00 | b. | $50.50 | c. | $53.50 | d. | $47.50 | e. | $49.00 |

____ 19. The Ehrhardt Company's last dividend was $2.00. The dividend growth rate is expected to be constant at 3% for 2 years, after which dividends are expected to grow at a rate of 8% forever. Erhardt's required return (rs) is 12%. What is Erhardt's current stock price? a. | $53.80 | b. | $49.20 | c. | $57.30 | d. | $55.10 | e. | $51.40 |

____ 20. Bauer Inc's bonds currently sell for $1,275 and have a par