Objective: Calculating stock and bond valuation

Stock Valuation ABC Inc. just paid dividend of $1.12 per share. The companys earnings is expected to grow at 3.5% per year permanently and the company will continue to pay dividends. The equity cost of capital is 7.6% per year. What is the expected value of this company?

Bond Valuation 01 GRX company has a 5 year maturity with a face value of $1000 and coupon rate is 2.4% per year. The coupon is paid semi-annually. The yield to maturity is 3.5% per year. What is the value of this bond? (Hint: since the cash flows are semi-annual, you need to adjust every input accordingly when you use time value of money formulas.)

Bond Valuation 02 U.S. Treasury department has a 5 year maturity with a face value of $1000 and annual coupon rate is 2.4%. The yield to maturity is 2.4%. The coupon is paid semi-annually. What is the value of this bond? (Hint: since the cash flows are semi-annual, you need to adjust every input accordingly when you use time value of money formulas.)

What is the credit spread by using the question 2 and 3?

What is the 10-year Treasury note yield as of the day you are recording for this homework assignment?