13. Consider a preferred stock whose market price is $90 and pays a dividend of $4 per share. The required rate of return is 5%. Is this stock undervalued, overvalued, or

is NPV = 0?

14. Suppose the yield to maturity on a bond is 4%. If the investor spends all coupon

income, will the yield to maturity be lower than 4%, equal to 4%, or greater than 4%?

15. What variable accounts for the difference between net income (EAT) and after-tax

cash flow?

16. When and how often do zero-coupon bonds pay interest?

The total value of your portfolio is $10,000: $3,000 of it is invested in stock a and the remainder invested in stock b. stock a has a beta of 0.8; stock b has a beta of 1.2. the risk premium on the market portfolio is 8%; the risk-free rate is 2%. additional information on stocks a and b is provided below. return in each state state probability of state stock a stock b excellent 15% 15% 5% normal 50% 9% 7% poor 35% -15% 10% what are each stock’s expected return and the standard deviation? what are the expected return and the standard deviation of your portfolio? what is the beta of your portfolio? using capm, what is the expected return on the portfolio? given your answer above, would you buy, sell, or hold the portfolio?

Randall's, inc. has 20,000 shares of stock outstanding with a par value of $1.00 per share. the market value is $12 per share. the balance sheet shows $42,000 in the capital in excess of par account, $20,000 in the common stock account, and $50,500 in the retained earnings account. the firm just announced a 5 percent (small) stock dividend. what will the balance in the retained earnings account be after the dividend?

Communication comes in various forms. which of the following is considered an old form of communication? a) e-mail b) letter c) skype d) texting