1. Eight months ago, Turner purchased 110 shares of Delta Frames stock at a price of $47 a share. Delta pays a quarterly dividend of $1.10 a share. Today, Turner sold all of his shares for $49 per share. What is Turner's total capital gain on this investment?
a. $180
b. $375
c. $220
d. $200
e. $155
2. Ernst's Electrical has a bond issue outstanding with ten years to maturity. These bonds have a $1,000 face value, a 5 percent coupon, and pay interest annually. The bonds are currently quoted at 110 percent of face value. What is Ernst's pre-tax cost of debt?
a. 3.78 percent
b. 4.40 percent
c. 4.53 percent
d. 3.33 percent
e. 3.47 percent