Question
1.Suppose aten-year, $1,000 bond with an 8.4% coupon rate and semiannual coupons is trading for $1,034.12. a. What is thebond's yield to maturity(expressed as an
1.Suppose aten-year, $1,000 bond with an 8.4% coupon rate and semiannual coupons is trading for $1,034.12.
a. What is thebond's yield to maturity(expressed as an APR with semiannualcompounding)?
b. If thebond's yield to maturity changes to 9.7% APR, what will be thebond's price?
2.SARcompany's ordinary shares are expected to pay$ 2.5 per share in dividends in 4 years and after which the dividends are expected to grow at 1% annually forever. CompanyABC's shares have a beta of 1.3. Thelong-term return of ASX200 is 9.1% and the return ofT-bonds is 4.3%.
a.What is the expected return ofSAR's shares according to theCAPM?
b.What is the implied price pershare?
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Introduction to Managerial Accounting
Authors: Peter Brewer, Ray Garrison, Eric Noreen
7th edition
978-1259675539, 125967553X, 978-1259594168, 1259594165, 78025796, 978-0078025792
