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In this assignment you will need to provide answers to 10 questions relating to the values of bonds and stocks. See the Required Section below
In this assignment you will need to provide answers to 10 questions relating to the values of bonds and stocks. See the "Required" Section below for the details for each. | ||||||
Required: | ||||||
A. What is the value of a 5%, $1,000 face value bond that matures is 11 years if investors require a 5% return on their investment? | ||||||
B. What will be the price of a 4.6%, $1,000 face value bond seven years from today if the bond matures in 21 years and the going rate of interest for such bonds is 7%? | ||||||
C. What is the value of a $1,000 zero-coupon bond that matures in 26 years when the required rate of return is 11%? | ||||||
D. What is the yield-to-maturity of a $1,000 bond with a coupon rate of 4%, a 20 year maturity, and a current price of $1,240? | ||||||
E. What is the price of one share of 6% preferred stock that has a par value of $50 while investors have a required rate of return of 9%? | ||||||
F. What is the required rate of return on a $7 preferred stock with a market price of $67 and a par value of $50? | ||||||
G. Using the dividend growth model, what is the value of one share of a common stock that paid a dividend of $3.10 yesterday when investors require a 9% return on their investment and who perceive that dividends will grow at 5% per year for the foreseeable future? | ||||||
H. What is a stock's total rate of return if it sells for $60 in the market, paid a dividend of $3.21 yesterday, and investors anticipate the company's dividend will grow at 4% for the foreseeable future? | ||||||
I. Assuming a stock sells for $71 and paid a $2 dividend yesterday, what is the stock's capital gains yield if it's dividends are expected to grow at 5.5% each year for the foreseeable future? | ||||||
J. What is a stock's total rate of return if it paid a dividend of $4 yesterday, sells for $39, and investers feel that dividends will grow at 6% per year for the foreseeable future? |
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