Page* Safe Assignment Problems C Corporation issues a bond which has a coupon rate of 1020%, a yield to matuntya 10.55%, a What is the A shipping company sold an issue of 12-year $1,000 par bonds to build new ships. The bonds pay 4.85% interest, semiannually Today's much should these bonds sell for today? Round off to the nearest $1. 2. required rate ofretum is 9.7%. How 3. Assume a company has an issue of 18-year $1,000 par value bonds that pay 7% interest. annually Further assume that today's required rate of return on these bonds is 5% How much would these bonds sell for today? Round off to the nearest $1. ABC company issued bonds on January 1, 2006. The bonds had a coupon rate of 5.5%, with interest paid semiannually, The face value of the bonds is $1,000 and the bonds mature on Jannary 1, 2021. What is the yield to maturity for these bonds on January I, 2012 if the market price of the bond on that date is SO50? 5. A $1,000 par value 14-year bond with a 10 percent coupon rate recently sold for $963 What is the yield to maturity? Consider a 10 year bond with face value $1,000, pays 6% coupon semi-annually and has a yield to maturity of 7% How mnch would the approximate percentage change in the price of bond if interest rate in the economy decreases by 0 8096 per year? 6. 7. ACME lac expects its curent anaual $2 50 per share common stock dividend to remain the same for the foreseeable future. What is the valse of the stock to an iavestor with a required return of 12%? 8. ABC Company's common stock is expected to pay a $2.00 dividend in the coming year. If investors require a 17% return and the growth rate in d vidends is expected to be what will the market price of the stock be? 9 . ABC Corporation stock is currently selling for SSS00, t " expected to pay $5 00 at the end of the year Dividends are expected to grow at a constant rate or7,5%