13. Consider a preferred stock whose market price is $90 and pays a dividend of $4 per share. The required rate of return is 5%. Is this stock undervalued, overvalued, or

is NPV = 0?

14. Suppose the yield to maturity on a bond is 4%. If the investor spends all coupon

income, will the yield to maturity be lower than 4%, equal to 4%, or greater than 4%?

15. What variable accounts for the difference between net income (EAT) and after-tax

cash flow?

16. When and how often do zero-coupon bonds pay interest?

Cherokee inc. is a merchandiser that provided the following information: amount number of units sold 20,000 selling price per unit $ 30 variable selling expense per unit $ 4 variable administrative expense per unit $ 2 total fixed selling expense $ 40,000 total fixed administrative expense $ 30,000 beginning merchandise inventory $ 24,000 ending merchandise inventory $ 44,000 merchandise purchases $ 180,000 required: 1. prepare a traditional income statement. 2. prepare a contribution format income statement.