Seattle Best Company common stock is currently selling for $40 per share. Secu

Seattle Best Company common stock is currently selling for $40 per share. Security analysts at Goldman Sachs have assigned the following probability
distribution to the price of (and rate of return on) Seattle Best stock one year from now:

Price

Rate of Return

Probability

$35

-30.0%

0.35

$45

-10.0%

0.35

$55

+10.0%

0.05

$65

+30.0%

0.25

Assuming that Seattle Best is not expected to pay any dividends during the coming year determine the expected rate of return on Seattle Best stock.

0.00%
-30.00%
+22.00%
-6.00%

What is the value of a Verismo Company%u2019s bond that has a 12 percent coupon pays interest semiannually and has 20 years
to maturity if the required rate of return is 15 percent?

$767.58
$1015.20 $912.22
$811.08