Question
1. XYZ company has just issued a 30-year bond with a coupon rate of 7.50% ( annual coupon payments ) and a face value of
1.
XYZ company has just issued a 30-year bond with a coupon rate of 7.50% (annual coupon payments) and a face value of $1,000. If the yield to maturity is 12%, what is the price of the bond? Round to the nearest cent.
2.
ABC Company will pay a dividend of $7.14 in one year. If you expect the company's dividend to grow by 8% per year, what is its share price if its equity cost of capital is 15%? (Round to the nearest cent)
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An Introduction to Investment Banks, Hedge Funds, and Private Equity
Authors: David P. Stowell
1st edition
978-0123745033, 0123745039, 978-9380931074
