1. Assume that the expected dividend on each share of common stock is K 5. Each share of common stock is currently trading at K50 and has an expected growth rate of 7%. What is the yield on common stock?
2. Compare and contrast the fisher effect and the international fisher effect.
3. What should be the price of a bond paying 4.5% interest semiannually with 9 years to maturity when the market interest rate is 2.5%?
4. Which of the following is not a mechanism used by a board of directors and shareholders to get managers to act in shareholders' best interests?
a. Threat of firing.
b. Managerial compensation.
c. S corporation.
d. Threat of takeover.