Question
Please show works 1.The H&H Computer Company has an outstanding issue of bond with a par value of $1,000, paying 12 percent coupon rate semi-annually.
Please show works
1.The H&H Computer Company has an outstanding issue of bond with a par value of $1,000, paying 12 percent coupon rate semi-annually. The bond was issued 25 years ago and has 5 years to maturity. What is the value of the bond assuming 14 percent market interest rate?
2. Compute the value of a share of common stock of a company whose most recent dividend was $2.50 and is expected to grow at 6 percent per year for the next 2 years, after which the dividend growth rate will decrease to 3 percent per year indefinitely. Assume a 10 percent required rate of return.
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