Question
--Consider a Zerobond (i.e., a bond that pays no coupon payment, meaning that the coupon rate on the bond is 0%) with a par value
--Consider a Zerobond (i.e., a bond that pays no coupon payment, meaning that the coupon rate on the bond is 0%) with a par value of $1,000 that will mature exactly 12 years from today. The current YTM of this Zerobond is 5.2%. Two years ago the YTM of the same Zerobond was 4.6%. Calculate the dollar price increase/decrease (2 decimal places) within the last two years. If the bond falls in price, enter your answer on D2L as a negative value (i.e., put a minus sign before your number with no space between the minus sign and the number). If the bond increases in price, record the dollar amount of the increase.
-The current price of a 25-year, $1,000 par value bond is $1,158.91. Interest on this bond is paid every six months, and the current yield to maturity on this bond 13.4 percent. Given these facts, what is the annual coupon rate on this bond?
-Compute the price of a companys stock that just paid a dividend of $3.52 (that is, D0 = 3.52), assuming that the growth rate in dividends is expected to be 6.5% per year forever and that the required rate of return on this stock is 15.5%.
-If shares of common stock of the Samson Co. offer an expected total return of 13% and if the growth rate in future dividends of the stock are expected to be 5.4% per year forever, what is the stocks dividend yield (i.e., D1/P0)?
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