Question
. NEED ANSWER ASAP / ANSWER NEVER USED BEFORE a.) Bond Valuation with Annual Payments Jackson Corporation's bonds have 13 years remaining to maturity. Interest
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NEED ANSWER ASAP / ANSWER NEVER USED BEFORE
a.)
Bond Valuation with Annual Payments
Jackson Corporation's bonds have 13 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 12%. The bonds have a yield to maturity of 13%. What is the current market price of these bonds? Do not round intermediate calculations. Round your answer to the nearest cent.
b.)
Maturity Risk Premium
The real risk-free rate is 3%, and inflation is expected to be 3% for the next 2 years. A 2-year Treasury security yields 7.3%. What is the maturity risk premium for the 2-year security? Round your answer to one decimal place.
%
c.)
Constant Dividend Growth Valuation
Boehm Incorporated is expected to pay a $1.60 per share dividend at the end of this year (i.e., D1 = $1.60). The dividend is expected to grow at a constant rate of 3% a year. The required rate of return on the stock, rs, is 10%. What is the estimated value per share of Boehm's stock? Do not round intermediate calculations. Round your answer to the nearest cent.
d.)
Nonconstant Dividend Growth Valuation
A company currently pays a dividend of $3.2 per share (D0 = $3.2). It is estimated that the company's dividend will grow at a rate of 15% per year for the next 2 years, and then at a constant rate of 7% thereafter. The company's stock has a beta of 1.3, the risk-free rate is 10%, and the market risk premium is 5.5%. What is your estimate of the stock's current price? Do not round intermediate calculations. Round your answer to the nearest cent.
$
e.)
Return on Common Stock You buy a share of The Ludwig Corporation stock for $22.10. You expect it to pay dividends of $1.02, $1.0781, and $1.1396 in Years 1, 2, and 3, respectively, and you expect to sell it at a price of $26.10 at the end of 3 years.
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