Question
Confused 1) What is the coupon rate of a 3-year, $1000 bond with coupons paid semiannually and a price of $900, if it has a
Confused
1) What is the coupon rate of a 3-year, $1000 bond with coupons paid semiannually and a price of $900, if it has a yield to maturity of 5%? Note: Express your answers in strictly numerical terms. For example, if the answer is 5%, write enter 0.05 as an answer."
2) "Company A has a current stock price of $70 and is expected to pay a $2 dividend in one year. The equity cost of capital is 20%. What price would its stock be expected to sell for immediately after it pays the dividend? Note: Express your answers in strictly numerical terms. For example, if the answer is $500, enter 500 as an answer."
3) "Company B is expected to pay dividends of $1.5 every 6 months for the next 3 years. If the current price of Company B stock is $21, and Company B's equity cost of capital is 20%. What price would you expect the stock to sell for at the end of 3 years? Note: Express your answers in strictly numerical terms. For example, if the answer is $500, enter 500 as an answer."
4) Company C pays a dividend of $2 per share and is expected to pay this amount indefinitely. The equity cost of capital is 5%. What is the price of the stock? Note: Express your answers in strictly numerical terms. For example, if the answer is $500, enter 500 as an answer."
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