Short corp just issued bonds that will mature in 10 years, and long corp issued bonds that will mature in 20 years. both bonds promise to pay a semiannual coupon, they are not callable or convertible, and they are equally liquid. further assume that the treasury yield curve is based only on the pure expectations theory. under these conditions, which of the following statements is correct?

(a) if the yield curve for treasury securities is flat, short's bond must under all conditions have the same yield as long's bonds.

(b) if the yield curve for treasury securities is upward sloping, long's bonds must under all conditions have a higher yield than short's bonds.

(c) if long's and short's bonds have the same default risk, their yields must under all conditions be equal.

(d) if the treasury yield curve is upward sloping and short has less default risk than long, then short's bonds must under all conditions have a lower yield than long's bonds.

(e) if the treasury yield curve is downward sloping, long's bonds must under all conditions have the lower yield.

Torino company has 1,300 shares of $50 par value, 6.0% cumulative and nonparticipating preferred stock and 13,000 shares of $10 par value common stock outstanding. the company paid total cash dividends of $3,500 in its first year of operation. the cash dividend that must be paid to preferred stockholders in the second year before any dividend is paid to common stockholders is:

Calculate the cost of each capital component—in other words, the after-tax cost of debt, the cost of preferred stock (including flotation costs), and the cost of equity (ignoring flotation costs). use both the capm method and the dividend growth approach to find the cost of equity.calculate the cost of new stock using the dividend growth approach.what is the cost of new common stock based on the capm? (hint: find the difference between re and rs as determined by the dividend growth approach and then add that difference to the capm value for rs.)assuming that gao will not issue new equity and will continue to use the same target capital structure, what is the company’s wacc? e. suppose gao is evaluating three projects with the following characteristics.each project has a cost of $1 million. they will all be financed using the target mix of long-term debt, preferred stock, and common equity. the cost of the common equity for each project should be based on the beta estimated for the project. all equity will come from reinvested earnings.equity invested in project a would have a beta of 0.5 and an expected return of 9.0%.equity invested in project b would have a beta of 1.0 and an expected return of 10.0%.equity invested in project c would have a beta of 2.0 and an expected return of 11.0%.analyze the company’s situation, and explain why each project should be accepted or rejected g

Which of the following best describes vertical integration? a. produce goods or services previously purchasedb. develop the ability to produce products that complement the original productc. develop the ability to produce the specified good more efficiently than befored. build long term partnerships with a few supplierse. sell products to a supplier or a distributor