Question
AFRICANAs 30- year bond pays 12 percent coupon interest semi-annually and has a par value of sh1, 000. If the bond currently selling at par,
AFRICANAs 30- year bond pays 12 percent coupon interest semi-annually and has a par value of sh1, 000. If the bond currently selling at par, what is the bonds yield to maturity (YTM) using the approximate method? [3 Marks] [c] What is the value of a preferred stock where the dividend rate is 16% percent on aSh100 par value? The appropriate discount rate for a stock of this risk level is 12 percent. [1 Mark] [d] Investors require a 15% rate of return on GDCs common stock (Ks = 15%). What will be GDCs stock value if the previous dividend was D0= Sh 2.00 and if investors expect dividends to grow at a constant compound annual rate is 10%?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started