1. What is the new monthly payment if the couple refinances? If a company's bonds are callable:

a. the bondholder has the right to sell an option on the bond.

b. the bonds are never allowed to remain outstanding until the maturity date.

c. the investor never knows what the redemption price will be until the bonds are actually called.

d. the issuing company is likely to retire the bonds before maturity if the bonds are paying 8% interest while the market rate of interest is 4%.

2. The following data apply to Garber Industries, Inc. (GII): Value of operations $1,000 Short-term investments $100 Debt $300 Number of shares 100 The company plans on distributing $50 million as dividend payments. What will the intrinsic per share stock price be immediately after the distribution?

a. $6.65 b. $7.72 c. $7.00 d. $7.35 e. $6.32