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Answer the following Financial questions in Microsoft Excel. The Finance concept of Stocks and Bonds Valuation needs to applied, when answering the questions. Q 1
Answer the following Financial questions in Microsoft Excel.
The Finance concept of Stocks and Bonds Valuation needs to applied, when answering the questions.
Q 1 JW Corp has paid a dividend of $0.50. The dividend is expected to grow at a 6% rate over time. Based on the stock's risk, investors require an 11-percent rate of return. Using the constant dividend growth model, what should the stock's price be? Q 2 Lerman Company has preferred stock outstanding. It pays an annual dividend of $10. If its current price is $70, what is the discount rate investors are using to value the stock? Q 3 The French Thaler and Company's stock has paid dividends of $1.60 over the past 12 months. Its historical growth rate of dividends has been 8 percent but analysts expect the growth to slow to 5 percent annually for the foreseeable future. Determine the value of the stock if the required rate of return on stocks of similar risk is 15 percent. Q 4 A $1,000 face value bond issued by the Dysane Company currently pays total annual coupon of $79 per year and has a 13-year life. What is the present value, or worth, of this bond if investors are currently willing to accept a 10 percent annual rate of return on bonds of similar quality if the bond is a Eurobond? Q 5 How would your answer in Question 4 change if the bond is a U.S. bond?
| Answer the following Financial questions in Microsoft Excel. The Finance concept of Stocks and Bonds Valuation needs to applied, when answering the questions. | |
| Q 1 | JW Corp has paid a dividend of $0.50. The dividend is expected to grow at a 6% rate over time. Based on the stock's risk, investors require an 11-percent rate of return. Using the constant dividend growth model, what should the stock's price be? |
| Q 2 | Lerman Company has preferred stock outstanding. It pays an annual dividend of $10. If its current price is $70, what is the discount rate investors are using to value the stock? |
| Q 3 | The French Thaler and Company's stock has paid dividends of $1.60 over the past 12 months. Its historical growth rate of dividends has been 8 percent but analysts expect the growth to slow to 5 percent annually for the foreseeable future. Determine the value of the stock if the required rate of return on stocks of similar risk is 15 percent. |
| Q 4 | A $1,000 face value bond issued by the Dysane Company currently pays total annual coupon of $79 per year and has a 13-year life. What is the present value, or worth, of this bond if investors are currently willing to accept a 10 percent annual rate of return on bonds of similar quality if the bond is a Eurobond? |
| Q 5 | How would your answer in Question 4 change if the bond is a U.S. bond? |
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Sure lets go through each of these questions step by step Q1 Stock Valuation using the Constant Dividend Growth Model JW Corp has paid a dividend of 050 The dividend is expected to grow at a 6 rate ov...
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Global Marketing management
Authors: Masaaki Kotabe, Kristiaan Helsen
5th edition
978-0470505748
