250FIN-R Question 4 a. Describe how yield to maturity is the same concept as the internal rate of return on an investment [4 marks) b. (0) How can the market price of a bond be described in terms of present value? () Why is current yield not a good indicator of bond returns? (Relate your answer to maturity considerations.) How is a bond's coupon rate different from its coupon yield? [8 marks) C. A bond has a 1,000 par value, 25 years to maturity, and an 8% coupon yield. 0 Calculate the price of the bond if the required rate of return (yield to maturity (YTM)) is A) 6%, B) 8%, and C) 10%. () What general relationship between bond prices and yields is demonstrated by this problem? [13 marks] d. Jebba Plc shares currently sell for 70 per share. The market requires a 14 per cent return on the firm's equity. If the company maintains a constant 6.2 percent growth rate in dividends, what was the most recent dividend per share paid on the equity? [5 marks) [Total 30 marks]