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A. Abu Dhabi National Oil Company (ADNOC) has four-year bonds outstanding that pay a 7 per cent coupon rate. Investors buying the bond today can
A. Abu Dhabi National Oil Company (ADNOC) has four-year bonds outstanding that pay a 7 per cent coupon rate. Investors buying the bond today can expect to earn a yield to maturity of 5 per cent. What should the company's bonds be priced at today? Assume annual coupon payments of $70. (Bond Par Value: $1000). ( 3 marks) B. Eagle Company has been generating stable revenues but sees no growth in it for the foreseeable future. The company's last dividend was 4.5, and it is unlikely to change the amount paid out. If the required rate of return is 10 per cent, what are the shares worth today? ( 3 marks)
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