1. If the yield-to-maturity of a bond is lower than the coupon rate, the bond will sell at:

a) a premium

b) a discount

c) par valule

d) its call price

2. ABC Inc. has issued twenty-year semiannual coupon bonds with a face value of $1,000. If the annual coupon rate is 10% and the current yield to maturity is 9%, what is the firm's current price per bond?

a) $578.82

b) $905.35

c) $1,092.00

d) $1,103.19

3. Given the following information, calculate the price paid for this common stock:

Expected dividend growth rate= 3%

Next expected dividend payment= $2.8

Required rate of return= 9%

a) $40.00

b) $46.67

c) $48.07

d) $56.13