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a) If a coupon bond of 19 years that pays an 9.7% coupon, has a face value of GH 1,000 and the prevailing discount rate
a) If a coupon bond of 19 years that pays an 9.7% coupon, has a face value of GH 1,000 and the prevailing discount rate is 13.6%, compute its current price. Is this a discount or premium bond? (b) Assume the bond in (a) pays its coupon semiannually. Using the other information in (a), compute its price. (c) Common shares of Janti ltd. will grow at 16.1% for three years. The growth rate will decrease to 13.3% for two years after that. The growth rate will later drop to 9.5% and remain constant thereafter. The company just paid a dividend of GH 0.41. If the cost of equity is 11.1%, compute its price. (d). A company sells preference shares to raise GH 1.5 million. Each share pays a dividend of GH 1.25. The market interest rate is 7.9 percent. i. What should be the price per preference share? ii. How many shares should be sold to raise the raise GH 1.5 million
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