BONDS 1) What is the coupon of a bond selling at par having in mind that interest rates are fixed at 12 percent? 2) A consol is selling at premium with a coupon rate of 12 percent. How much would you pay for it if you knew that interest rates are 3 percent? What would have been the price if coupon were paid every sixth months? 3) What is the maximum price of a fixed-coupon bond paying quarterly with a coupon rate of 10 percent, interest rate of 15 percent, and a maturity of seven years. 4) What is the coupon rate of a consol bought at 900 USD knowing that interest rate is 10 percent? COMMON STOCKS 1) What would be you maximum investment on a corporate stock with the following information: - Dividend just paid is 3 USD - Dividend paid after one year is 5 USD during 3 years - Dividend paid starting year 5 is 10 USD knowing there no dividend will be paid at year 4 - Interest rate is 15 percent 2) How much would you expect as dividend in seven year from now if you have just been paid 5 USD as dividend and you know that dividends are expected to grow at a constant rate of 3 percent? 3) How much would you pay on a stock knowing that the first dividend will be 4 USD expected to grow at 5 percent and the next dividend will be paid four years from now expected to grow at 6 percent per year forever. Interest rate is 10 percent. BONDS 1) What is the coupon of a bond selling at par having in mind that interest rates are fixed at 12 percent? 2) A consol is selling at premium with a coupon rate of 12 percent. How much would you pay for it if you knew that interest rates are 3 percent? What would have been the price if coupon were paid every sixth months? 3) What is the maximum price of a fixed-coupon bond paying quarterly with a coupon rate of 10 percent, interest rate of 15 percent, and a maturity of seven years. 4) What is the coupon rate of a consol bought at 900 USD knowing that interest rate is 10 percent? 2) A consol is selling at premium with a coupon rate of 12 percent. How much would you pay for it if you knew that interest rates are 3 percent? What would have been the price if coupon were paid every sixth months? 3) What is the maximum price of a fixed-coupon bond paying quarterly with a coupon rate of 10 percent, interest rate of 15 percent, and a maturity of seven years