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1. A corporate bond has 23 years to maturity, a face value of $1,000, a coupon rate of 4.9% and pays interest semiannually. The annual
1. A corporate bond has 23 years to maturity, a face value of $1,000, a coupon rate of 4.9% and pays interest semiannually. The annual market interest rate for similar bonds is 3.2%. What is the value of the bond?
2. Pro Build Inc. has had a net income of $16 million in its most recent year. Net income is expected to grow by 3% per year.
The firm always pays out 40% of net income as dividends and has 7 million shares of common stock outstanding. The required return is 9%.
What is the intrinsic value of the stock?
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