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How do I calculate these to end up with the correct answer highlighted in Green? A 20 year bond has a price of $1091, a
How do I calculate these to end up with the correct answer highlighted in Green?
A 20 year bond has a price of $1091, a yield to maturity of 9%, and a coupon rate of 10%. What rate of return will the holder of the bond expect to earn from the change in the bond price next year? 10% -0.17% 1% -9.17% A stock is expected to pay a $1 dividend next year, and the dividend is expected to grow at 2% a year, forever. The stock is also expected to pay a special dividend of $10 in three years. If investors require a 10% return, what is your estimate of the stock price? $21.05 $20.01 $22.50 $12.50 A 20 year bond has a price of $1091, a yield to maturity of 9%, and a coupon rate of 10%. What rate of return will the holder of the bond expect to earn from the change in the bond price next year? 10% -0.17% 1% -9.17% A stock is expected to pay a $1 dividend next year, and the dividend is expected to grow at 2% a year, forever. The stock is also expected to pay a special dividend of $10 in three years. If investors require a 10% return, what is your estimate of the stock price? $21.05 $20.01 $22.50 $12.50Step by Step Solution
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