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A $5,000 bond with a coupon rate of 5.2% paid semiannually has two years to maturity and a yield to maturity of 7.5%. If interest
A $5,000 bond with a coupon rate of 5.2% paid semiannually has two years to maturity and a yield to maturity of 7.5%. If interest rates rise and the yield to maturity increases to 7.8%, what will happen to the price of the bond? A. fall by $26.55 B. rise by $26.55 C. fall by $31.85 D. The price of the bond will not change. You expect that Bean Enterprises will have earnings per share of $2 for the coming year. Bean plans to retain all of its earnings for the next three years. For the subsequent two years, the firm plans on retaining 50% of its earnings. It will then retain only 25% of its earnings from that point forward. Retained earnings will be invested in projects with an expected return of 20% per year. If Bean's equity cost of capital is 11%, then the price of a share of Bean's stock is closest to: A. $33.32 B. $13.33 C. $53.31 D. $19.99
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