1. Four years ago, Goodwynn & Wolf Incorporated sold a 30-year bond issue with a 12.50% annual coupon rate and a 7.50% call premium. Today, G&W called the bonds. The bonds originally were sold at their face value of $1,000. Compute the realized rate of return for investors who purchased the bonds when they were issued and who surrender them today in exchange for the call price.

14.02%

14.94%

12.50%

7.50%

2. An issue of preferred stock is paying an annual dividend of $4.50. The growth rate for the firm's common stock is 6%. What is the preferred stock price if the required rate of return is 10%? (Round your answer to 2 decimal places.)

$45.00

$50.00

$42.50

$47.50