Question
1. UH wants to fund the new medical school by taking out some debt. UH decides to issue a SEMI-annual coupon bond. The bond has
1. UH wants to fund the new medical school by taking out some debt. UH decides to issue a SEMI-annual coupon bond. The bond has face value of $1,000, a coupon rate of 5%, a YTM of 8%, and 15 years to maturity. What is the price of this UH bond? 2. The US treasury issues a 10 year, zero-coupon bond. The face value of this bond is $1,000 and the YTM is 2%. What is the price of this treasury bond? 3. You want to invest in Lululemon. They expect to pay a $6.9 dividend next year. The cost of capital for Lululemon is 11% and the growth rate of the dividend is expected to be 5%. What is the price of the stock? (Do not include dollar sign in answer)
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