CMS Corporation's balance sheet as of today is as follows:

Long-term debt (bonds, at par)	$10,000,000
Preferred stock	2,000,000
Common stock ($10 par)	10,000,000
Retained earnings	4,000,000
Total debt and equity	$26,000,000

The bonds have an 4.3% coupon rate, payable semiannually, and apar value of $1,000. They mature exactly 10 years from today. Theyield to maturity is 12%, so the bonds now sell below par. What isthe current market value of the firm's debt?

Select the correct answer.

a. $5,586,184

b. $5,585,483

c. $5,584,080

d. $5,584,782

e. $5,586,885

A 25-year, $1,000 par value bond has an 8.5% annual coupon. Thebond currently sells for $1,025. If the yield to maturity remainsat its current rate, what will the price be 5 years from now?

Select the correct answer.

a. $1,019.58

b. $1,022.19

c. $1,020.45

d. $1,023.06

e. $1,021.32

5-year Treasury bonds yield 3.7%. The inflation premium (IP) is1.9%, and the maturity risk premium (MRP) on 5-year bonds is 0.4%.What is the real risk-free rate, r*?

Select the correct answer.

a. 1.21%

b. 1.40%

c. 1.59%

d. 1.02%

e. 0.83%

A stock is expected to pay a dividend of $0.75 at the end of theyear. The required rate of return is r_s = 10.5%, and theexpected constant growth rate is g = 5.5%. What is the stock'scurrent price?

Select the correct answer.

a. $17.44

b. $16.22

c. $15.00

d. $18.66

e. $19.88

A stock just paid a dividend of D₀ = $1.50. Therequired rate of return is r_s = 11.0%, and the constantgrowth rate is g = 4.0%. What is the current stock price?

Select the correct answer.

a. $21.75

b. $21.21

c. $22.29

d. $22.02

e. $21.48

$31.00 per share is the current price for Foster Farms' stock.The dividend is projected to increase at a constant rate of 5.50%per year. The required rate of return on the stock, r_s,is 9.00%. What is the stock's expected price 3 years fromtoday?

Select the correct answer.

a. $34.50

b. $34.13

c. $35.24

d. $34.87

e. $33.76