Question
1) Determine the interest payment for the following three bonds: 5.25 percent coupon corporate bond (paid semiannually) and a 4.875 percent coupon Treasury note (paid
1) Determine the interest payment for the following three bonds: 5.25 percent coupon corporate bond (paid semiannually) and a 4.875 percent coupon Treasury note (paid semiannually). 2 points Show your work. 2) Compute the price of a 5.6 percent coupon bond with 20 years left to maturity and a market interest rate of 6.8 percent. (Assume interest payments are semiannual.) 2 points Show your work. Is this a discount or premium bond? 3) A 5.50 percent coupon bond with 18 years left to maturity is offered for sale at $923.22. What yield to maturity is the bond offering? (Assume interest payments are semiannual.) 2 points Show your work. 4) Skyworks has earnings per share of $6.15 and a P/E ratio of 16.5. What's the stock price? 2 points Show your work. 5) American Water Works recently earned a profit of $4.37 per share and has a P/E ratio of 15. The dividend has been growing at a 5 percent rate over the past few years. 2 points a. If this growth rate continues, what would be the stock price in five years if the P/E ratio remained unchanged? Show your work. b. What would the price be if the P/E ratio declined to 12 over the five years? Show your work.
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