Question
A]Discuss the relationship between the coupon rate and the required rate of return that will casue a bond to be sold at its par value
A]Discuss the relationship between the coupon rate and the required rate of return that will casue a bond to be sold at its par value ,a discount or a premium. B]Although debt and equity capital are both sources of external financing used by firms,they are very different in several important respects. What are key differences between debt and equity? C]Google corporation bullas and maintains public road across the country.They have an outstanding issue of RM1OOO par value bonds with an 9% coupon internet rate per annum.The issue pays internet semi-annualy and has 1O years remaining to its maturity date.If Bonds of similar risk are currently earning a 12% rate of return annually. How much should Google corporations bond sell for today? D]Assume that a bond with RM1OOO par value has a coupon of 12% that pays-semi-anauly and will mature in 3 years. It has a current price quote of RM94O.Given this information ,what is the yield to maturity for this bond? E]Yandex incorporation is considering a cash purchase of Aluminiums stock .During the year just completed. Aluminium earned $4.5O per share and paid cash dividends of $2.3O per share[DO=2.3O].Aluminiums earning and dividends are expected to grow at 2O% per year for the next 2 years, after which the are expected to grow at 5% per year forever. What is the maximum price per share that Yandex incorporation should pay for Aluminium if it has a required return of 12% on investments with risk characteristics similar to those of Aluminium?
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