Answered step by step
Verified Expert Solution
Question
1 Approved Answer
HELP! 9.(0.5 points) GlowStreet issued a bond, which pays semi-annually and has 25 years to maturity. Par value is $1,000, the market price is $919.44
HELP!
9.(0.5 points) GlowStreet issued a bond, which pays semi-annually and has 25 years to maturity. Par value is $1,000, the market price is $919.44 and the yield to maturity is 8.00%. The bond's annual coupon rate is %. a. 7.75 b. 7.50 c. 7.25 d. 8.00 e. None of the above 10. (0.5 points) Gekko Industries plans to issue a $1,000 par, semi-annual pay bond with 20 years to maturity and a coupon rate of 7.00%. The company expects the bonds to sell for $900.00. Gekko Industries' cost of debt (as a stated annual rate) is estimated to be %. a. 8.011 b. 8.511 c. 8.702 d. 8.949 e. None of the above 11. (1 point) Five years ago HBCC Inc. sold a 20-year, $1,000 par value, semi-annual pay bond with a coupon rate of 8.00% for $1,000.00. Today the bond's YTM has risen to 9.500%. Therefore, the bonds are currently selling a. at a discount b. at a premium c. at par d. above market price e. not enough information to answer 12. (0.5 points) HFB just paid a dividend of $4.00. The market believes that the dividend will grow at a constant rate of 5% forever. HFB's stock price is $50.00. HFB's cost of equity is %. a. 13.40 b. 13.50 c. 14.00 d. 13.00 e. None of the aboveStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started