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Maritza has one share of stock and one bond. The total value of the two securities is 1,127 dollars. The bond has a YTM of
Maritza has one share of stock and one bond. The total value of the two securities is 1,127 dollars. The bond has a YTM of 12.58 percent, a coupon rate of 11.34 percent, and a face value of 1,000 dollars; pays semi-annual coupons with the next one expected in 6 months; and matures in 12 years. The stock pays annual dividends and the next dividend is expected to be 5.89 dollars and paid in one year. The expected return for the stock is 17.94 percent. What is the price of the stock expected to be in 1 year?
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