Bond and Stock Valuation No Ans
Bond and Stock Valuation No Ans
Bond and Stock Valuation No Ans
Bond Returns
8. What is the yield to maturity (YTM) and the yield to call (YTC) of the
following annual bond?
9. What is the yield to maturity and the yield to call of the following
annual bond?
10. What is the yield to maturity and the yield to call of the following
semi-annual bond?
face value: $1,000
maturity: 10 years
coupon rate: 10%
price: $1,000
call price: $1,150
years to call: 4
11. What is the yield to maturity and the yield to call of the following
semi-annual bond?
12. What is the yield to maturity and the yield to call of the following
quarterly bond?
Common Stock
13. KKL Enterprises pays a dividend of $1.50, and you expect the
dividend to remain constant. How much would you pay for the
stock, if your required rate of return were 11%?
14. GBS Enterprises has just paid a dividend of $2.00, and you expect
the dividend to increase at 3% forever. How much would you pay
for the stock, if your required rate of return were 9%?
Preferred Stock
20. A firm pays a preferred dividend of $5.50, and the required rate of
return is 10.2%. What should be the price of the preferred share?
21. A firm pays a preferred dividend of $6.20, and the required rate of
return is 8.9%. What should be the price of the preferred share?
22. A firm pays a preferred dividend of $3.30, and the required rate of
return is 10.7%. What should be the price of the preferred share?
23. A firm pays a preferred dividend of $7.60, and the required rate of
return is 8.3%. What should be the price of the preferred share?
24. A firm pays a preferred dividend of $7.45, and the required rate of
return is 11.2%. What should be the price of the preferred share?
26. GII Enterprises will pay a dividend of $1.50 next year, and your
required rate of return is 12%. If you expect the dividend to grow
forever (at a constant rate), and you are now willing to pay $30.00
to purchase GII stock. What must the implied growth rate?
27. IIL has pays a constant dividend of $1.50, and you are now to pay
$30.00 for the stock. What is the implied required rate of return?
28. IKI Enterprises has just paid a dividend of $4.50. You expect the
dividend to increase at 3.2% forever, and you are now willing to pay
$55.54 for the stock. What is the implied required rate of return?
29. A firm will pay a dividend of $3.31 next year, and your required rate
of return is 15.7%. If you expect the dividend to grow forever (at a
constant rate), and you are now willing to pay $30.00 to purchase
the stock. What must the implied growth rate?