Question
A 13-year coupon bond pays a 12.7% coupon. The market discount rate is 10.5%. How much should the bond sell for as it price. Is
A 13-year coupon bond pays a 12.7% coupon. The market discount rate is 10.5%. How much should the bond sell for as it price. Is this a discount or premium bond? b) Assume now that the bond in (a) is a semi-annual coupon bond. Using all other information in (a), compute its price. c) The ordinary shares of Afram Plains Limited just paid a dividend of GH 1.25. It is expected that dividends and income will grow at the same rate of 14.05% for two years and 10.3% for another two years. The growth rate will drop to a constant 7.5% after that. The company just paid a dividend of. If the cost of equity is 11.1%, compute its price. d) What is the market value of a $1,000 face-value bond of 15 years with a 12 percent coupon rate when the market's rate of return is 8 percent?
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