Question
4. Baker Corp. pays a constant $1.8 dividend on its stock. The company will maintain this dividend for the next 15 years and will then
4.
Baker Corp. pays a constant $1.8 dividend on its stock. The company will maintain this dividend for the next 15 years and will then cease paying dividends forever. If the required return on this stock is 5 percent, what would the current share price be?
Group of answer choices
$12.99
$30
$18.68
$36
$27
1.
Compare the coupon rates on the following pairs of bonds assuming all else equal. A senior bond ______ a junior bond; a bond without a sinking fund ________ one with a sinking fund.
Group of answer choices
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<, >
2.
Which of the following bond has the highest interest rate risk?
15-y & 4% coupon
10-y & 6% coupon
10-y & 4% coupon
15-y & 1% coupon
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