Calculations Shown

A) A bond that has a $1000 par value (face value) and a contract or coupon interest rate of 11.7 percent. Interest payments are $58.50 and are paid semiannually. The bonds have a current market value of $1,126 and will mature in 10 years. The firms marginal tax rate is 34 percent.

B) A new common stock issue that paid a $1.82 dividend last year. The firms dividends are expected to continue to grow at 7.5 percent per year, forever. The price of the firms common stock is now $27.71.

C) A preferred stock that sells for $135, pays a dividend of 9.1 percent, and has a $100 par value.

D) A bond selling to yield 7.8 percent where the firms tax rate is 34 percent.