10. DMA Corp. has bonds on the market with 14.5 years to maturity, a YTM of 5.3%, a par value of $1,000 and a current price of $965. The bonds make semiannual payments. What must the coupon rate be on these bonds.

Hint: You are solving for the payment, which will be a semi-annual payment. To get the annual payment you need to multiply by 2. Once you have the annual coupon payment, remember that annual coupon payment = par value * coupon rate

11. You find a zero coupon bond with a par value of $10,000 and 17 years to maturity. If the yield to maturity on this bond is 4.9 percent, what is the price of the bond? Assume semiannual compounding periods.

Hint: recall that zero coupon bonds are sold at a deep discount and then are redeemed at maturity for their par value. Although there are NO coupon payments (interest payments) over the life of the bond, the YTM is calculated assuming semi-annual compounding.

You solve this as any other problem, but remember that your # periods is years to maturity * 2 and the periodic YTM to use is stated YTM/2. You will be entering 0 for the PMT. The PV is exactly what the bond should be priced at today?

12. Toucan Enterprises has a $2,000 par value bond outstanding with a coupon rate of 4.9 percent paid semiannual and 13 years to maturity. The yield to maturity of the bond is 3.8 per cent. What is the price of the bond?

First, think about what we have here. The coupon rate is 4.9% while the YTM is 3.8%. When the coupon rate is higher than YTM, we know that the bond must sell at a premium (greater than par). There will be a loss in terms of capital (pay a premium and only receive par at maturity), but this is offset by the higher coupon rate.

When entering the coupon amount, dont forget to adjust for the non-standard par amount of $2,000

10. DMA Corp. has bonds on the market with 14.5 years to maturity, a YTM of 5.3%, a par value of $1,000 and a current price of $965. The bonds make semiannual payments. What must the coupon rate be on these bonds.

Hint: You are solving for the payment, which will be a semi-annual payment. To get the annual payment you need to multiply by 2. Once you have the annual coupon payment, remember that annual coupon payment = par value * coupon rate

1.Crystal Glass recently paid $3.60 as an annual dividend. Future dividends are projected at $3.80, $4.10, and $4.25 over the next 3 years, respectively. Beginning 4 years from now, the dividend is expected to increase by 3.25 percent annually. What is one share of this stock worth to you if you require a 12.5 percent rate of return on similar investments?

2.The Big Wolf Mining Co just paid a dividend of $1.45 per share on its stock.The dividends are expected to grow at a constant rate of 6% per year indefinitely.If investors require a return of 11% on the stock, what is the current price?What will the price be in 3 years, in 15 years?

3.The next dividend for Baby Bella Cheese will be $1.89 per share.The dividends are anticipated to maintain a growth rate of 5% forever.If the stock currently sells for $38 per share, what is the required return?

What is Baby Bellas dividend yield?

What is the firms expected capital gain yield?

4.Johnnys Mexican Restaurants, Inc. is expected to pay the following dividends over the next 4 years: $12, $8, $7 and $2.50.Afterwards, the company pledges to maintain a constant 5% growth rate in dividends forever.If the required return on the stock is 12%, what is the current share price?