Question
Everything round to 2 1. You are considering acquiring a common stock that you would like to hold for one year. You expect to receive
Everything round to 2 1. You are considering acquiring a common stock that you would like to hold for one year. You expect to receive both $1.56 in dividends and $34.50 from the sale of the stock at the end of the year. What is the maximum price you will pay for the stock today if you want to earn a return of 11%?
2. Suppose that todays date is April 15. A bond with a 10% coupon paid semiannually every January 15 and July 15 is quoted as selling at an ask price of 101.1250 percent of par. If you buy the bond from a dealer today, what price will you pay for it?
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