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Investment questions help!!! 6. The bond has a coupon rate equals yield Id to maturity, the bond sells at par value, or $1,000. The modified
Investment questions help!!!
6. The bond has a coupon rate equals yield Id to maturity, the bond sells at par value, or $1,000. The modified duration of the bond at yield increases from 8% to 10%, the bond an ear maturity, an 8% coupon, and sells at an initial yield to maturity of 8%. Because the t ma, yield s i 1.26 years, and its convexity is 212.4. If the bond's price will fall to $811.46, a decline of 18.85% (10 points) How does the price change according to the duration rule? b. How doe a. s the price change according to the duration-with-convexity rule? gh Flyer Industries has just paid its annual dividend of $3 per share. The dividend is expected to grow at a constant rate of 8% indefinitely. The beta of High Flyer stock is 10, the risk-free rate is 6% and the market risk premium is 8%. (10 points) a. What is the intrinsic value of the stock? 7. Hi b. What would be your estimate of intrinsic value if you believed that the stock was riskier, with a beta of 1.25 Step by Step Solution
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