Bond features gives the bond holder an option

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1. In 2014 XYZ Co. had sales of $74 billion and a net income of $23 billion, and its year-end total assets were $200 billion. The firm's total debt to total assets ratio was 45.3%. What was XYZ Co.’s Return on Equity (ROE) in 2014?

22.97%

8.67%

25.62%

21.02%

2. Which of the following bond features gives the bond holder an option?

Call option

Par option

Convertible option

Coupon option

3. The common stock of a firm sells for $77.77 per share. The stock is expected to pay $1.89 per share next year (current dividend plus next year's growth) when the annual dividend is distributed. The market rate of return on this stock is 7.32%. What is the market's expected future growth rate of the dividend?

2.43% 9.75% 7.32% 4.89%

Reference no: EM132049468

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