Question
Please answer all please! 1)You have just purchased an outstanding 10-year bond with a par value of $1,000 for $1,145.68. Its annual coupon payment is
Please answer all please!
1)You have just purchased an outstanding 10-year bond with a par value of $1,000 for $1,145.68. Its annual coupon payment is $75. What is the bonds yield to maturity?
2)A share of common stock just paid a dividend of $1.00. If the expected long-run growth rate for this stock is 5%, and if investors' required rate of return is 14%, what is the stock price?
3)What is the Yield to Maturity (YTM) on the following bond? 10-year; 9% annual coupon; $1,000 par value; selling for $880.
4)D0 = $2.00. rs= 14%, If we have supernormal growth of 30% for 3 years, then a long-run constant g=6%, what is the value of stock today?
5)A Butcher Timber Company hired your consulting firm to help them estimate the cost of equity. The yield on the firm's bonds is 5.75%, and your firm's economists believe that the cost of equity can be estimated using a risk premium of 4.85% over a firm's own cost of debt. What is an estimate of the firm's cost of equity from retained earnings?
6)The Holmes Companys currently outstanding bonds have an 8% coupon and a 12% yield to maturity. Holmes believes it could issue new bonds at par that would provide a similar yield to maturity. If its marginal tax rate is 40%, what is Holmes after-tax cost of debt?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started