Question
All the details are there. I don't have anything else. a) Jon plc is listed on the London Stock Exchange. If, using the CAPM approach,
All the details are there. I don't have anything else.
a) Jon plc is listed on the London Stock Exchange. If, using the CAPM approach, Jons return on equity is 5% and risk premium is 3%. The beta is 0.7. What is the return on short dated government bonds?
b) Calculate the yield to maturity of a 100 nominal value irredeemable bond with a coupon rate of 6% and a market value of 110.
c) A 10-year corporate bond has 6 years remaining until redemption. The par value is 100 and it makes annual coupon payments. The coupon rate is 4%. The yield to maturity is 8%. Calculate the market price of the bond based on the above information.
d) Briefly discuss the factors to be considered when a company decides to make rights issues?
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