Question
Can you please help me with the below question with the steps? Thank you 7) If D1 = $2, g (which is constant) = 5%,
Can you please help me with the below question with the steps? Thank you
7) If D1 = $2, g (which is constant) = 5%, and P0 = $50, the stock's expected dividend yield is ____________ and capital gains yield is _________________?
8) If interest rates fall from 8 percent to 7 percent, which of the following bonds will have the largest percentage increase in its value?
9) If the bond's coupon rate is ___ than its yield to maturity, then the bond is sold at discount and you must expect a _______ each year until maturity.
10) The next dividend on Spirex Corporation's common stock is $4.00, and the expected growth rate is 10 percent. If you require a rate of return of 20 percent, what is the highest price you should be willing to pay for this stock?
11) You have just purchased a 10-year, $1,000 par value bond. The coupon rate on this bond is 8 percent annually, with interest being paid each 6 months. If you expect to earn a 10 percent simple rate of return on this bond, how much did you pay for it?
12) Your client has been offered a 5-year, $1,000 par value annual bond with a 10 percent coupon rate. If your client is to earn a simple rate of return of 12 percent, how much should she pay for the bond?
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