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5. Bonds issued by the U.S. government: A. Are considered to be free of interest...

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5. Bonds issued by the U.S. government: A. Are considered to be free of interest rate risk. B. Generally have higher coupons than comparable bonds issued by a corporation. C. Are considered to be free of default risk. D. Pay interest that is exempt from federal income taxes. E. Are called "munis." 6. The Firm X just paid a dividend of $1.26 per share on its stock. The dividends are expected to grow at a constant rate of 5 percent per year indefinitely. If investors require a 10 percent return on Firm X stock, what is the current price? A. 7.42 B. 26.14 C. 23.43 D. 25.2 E. 25.46

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