Question
1. A companys bonds have a par value of $1,000 par, 7.8% coupon rate and 30-year maturity. The bonds currently sell for $1,107.20 and pay
1.A companys bonds have a par value of $1,000 par, 7.8% coupon rate and 30-year maturity. The bonds currently sell for $1,107.20 and pay coupon semi-annually. What is the bonds' yield to maturity?
2.A Company's last dividend was $1.35. The dividend growth rate is expected to be constant at 3.5% forever. The required return on this company is 11%. What is the current stock price based on the constant growth model?
3.The company's beta is 1.25, the market risk premium is 8.50%, and the risk-free rate is 4.50%. What is the company's required return using CAPM?
4.A companys stock has a beta of 1.13. The market return is expected to be 11.75%, and the risk-free rate is 4.35%. What is the required rate of return on this company?
5.A preferred stock is expected to pay a dividend of $2.5 forever. If the required return on the preferred stock is 12%, what is its current market price?
6.A companys bonds currently sell for $1,150 and have a par value of $1,000. They have a 6.35% coupon rate with quarterly payments and a 20-year maturity. What is the YTM on these bonds?
7.A companys stock has a beta of 0.75. The required return based on CAPM is 11.75%, and the risk-free rate is 4.35%. What is the expected return on the market?
8.A company is expected to pay a dividend of $0.75 per share next year, and that dividend is expected to grow at a constant rate of 6.50% per year in the future. If the required return is 12%, what is this companys price based on the constant growth model?
9.A companys stock price is $23.45 in the market, and this companys dividend is expected to grow at the constant growth rate of 4% forever. The last dividend paid by this company was $1.20. What is the dividend yield for this company?
10.A companys stock price is $23.45 in the market, and this companys dividend is expected to grow at the constant growth rate of 4% forever. The last dividend paid by this company was $1.20. What is the required return on this company?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started