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PLEASE HELP FOR DOING THE EXCEL FOMULAR: 1) A bond has a par value of $1,000 with a coupon rate of 3.2%. The bond has
PLEASE HELP FOR DOING THE EXCEL FOMULAR:
1)
A bond has a par value of $1,000 with a coupon rate of 3.2%. The bond has 12 more years to maturity, and makes 2 interest payments per year. If the bond's YTM is 4.2%, what is the value (price) of the bond today? | ||||
$1,000.00 | ||||
3.2% | ||||
12 | ||||
4.2% | ||||
2 | ||||
Interest Pmt: | semiannually | |||
PV of Par: | ||||
PV of Interest: | ||||
PV of Bond |
2.
A share of stock has most recently paid am annual dividend of $4.50. The next dividend will be paid one year from today. If you assume the dividend will grow in perpetuity at an annual rate of 2% as it has in the past, and the Required Rate of Return is 8.2%, what is the value of a share of this stock, | ||||
$4.50 | ||||
8.2% | ||||
2.0% | ||||
Answer: | ||||
What would be the value of the stock described in question 2 if the annual dividend was not expected to grow. Assume the same Required Rate of Return. | ||||
Answer: |
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