{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-06-06T03:09:16-04:00", "answer_date": "2024-06-06 03:09:16", "is_docs_available": "", "is_excel_available": "", "is_pdf_available": "", "count_file_available": 0, "main_page": "student_question_view", "question_id": "2336518", "url": "\/study-help\/questions\/problem-1-four-and-a-half-years-ago-i-2336518", "question_creation_date_js": "2024-06-06T03:09:16-04:00", "question_creation_date": "Jun 06, 2024 03:09 AM", "meta_title": "[Solved] Problem 1 Four and a half years ago , I p | SolutionInn", "meta_description": "Answer of - Problem 1 Four and a half years ago , I purchased at par, a 10 year 6% coupon bond assuming that it pays semi-annual i | SolutionInn", "meta_keywords": "problem,1,four,half,years,ago,purchased,par,10,year,6%,coupon", "question_title_h1": "Problem 1 Four and a half years ago , I purchased at par, a 10 year 6% coupon bond assuming that it pays semi-annual interest.", "question_title": "Problem 1 Four and a half years ago , I purchased at", "question_title_for_js_snippet": "Problem 1 Four and a half years ago , I purchased at par, a 10 year 6 coupon bond assuming that it pays semi annual interest Today the market rate of interest is 4 and I'm considering to sell the bond a Since I'm selling the bond today i How much should I sell the bond for ii The current yield on the bond iii What will be my annual holding period return on the bond b Supposedly my friend offers me a price of $1125 for the bond today Would I be willing to sell the bond to her Problem 2 TESLA is a relatively young tech company It is going through a period of high growth and has thus decided not to pay any dividends until the end of year 6 At the end of year six it will pay a dividend of $two This dividend will grow at a rate of 25 for the next 4 years After that TESLA pledges to maintain a constant 5 growth rate in dividends for forever How much will I pay for a share of TESLA today Required rate of return is 18 ", "question_description": "

Problem 1<\/strong><\/p>

Four and a half years ago<\/u>, I purchased at par, a 10 year 6% coupon bond assuming that it pays semi-annual interest. Today the market rate of interest is 4% and I'm considering to sell the bond.<\/p>

a.Since I'm selling the bond today....<\/p>

i.How much should I sell the bond for?<\/p>

ii. The current yield on the bond?<\/p>

iii.What will be my annual holding period return on the bond? <\/p>

b.Supposedly my friend offers me a price of $1125 for the bond today. Would I be willing to sell the bond to her? <\/p>

Problem 2<\/strong><\/p>

TESLA is a relatively young tech company.It is going through a period of high growth and has thus decided not to pay any dividends until the end of year 6.At the end of year six it will pay a dividend of $two.This dividend will grow at a rate of 25% for the next 4 years.After that TESLA pledges to maintain a constant 5% growth rate in dividends for forever.How much will I pay for a share of TESLA today? Required rate of return is 18%.<\/p>", "transcribed_text": "", "related_book": { "title": "Horngrens Financial and Managerial Accounting", "isbn": "9780133851281, 013385129x, 9780134077321, 133866297, 133851281, 9780133851298, 134077326, 978-0133866292", "edition": "5th edition", "authors": "Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/467.jpg", "uri": "\/textbooks\/horngrens-financial-and-managerial-accounting-5th-edition-467", "see_more_uri": "" }, "free_related_book": { "isbn": "1565924266", "uri": "\/textbooks\/learning-the-vi-editor-6th-edition-978-1565924260-317169", "name": "Learning The Vi Editor", "edition": "6th Edition" }, "question_posted": "2024-06-06 03:09:16", "see_more_questions_link": "\/study-help\/questions\/business-marketing-2022-June-08", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/anya-and-nick-ramon-local-golf-stars-opened-the-chipshot", "description": "Anya and Nick Ramon, local golf stars, opened the Chip-Shot Driving Range on March 1, 2017, by investing $25,000 of their cash savings in the business. 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