Question 1: calculate the parts below, and select correct answer.

A 7% coupon semiannual bond has 10 years left until maturity. It is selling for $1100 today. If its yield rises by 25 basis points over the coming year, what should this bond be selling for a year from today? Assume a face value of $1000.

$1,010.28

$1,074.11

$957.70

$1047.30

$1125.00

A bond has a coupon rate of 6.8%. It pays interest semiannually. It was issued 5 years ago, at which time it has a remaining maturity of 15 years. Currently, its quoted price is 92. If you bought this bond today, what rate of return would you be expecting to make on the bond if you planned to hold it until it matures?

8.24%

8.81%

7.19%

7.98%

7.71%

Three years ago, you purchased a 7% coupon, semiannual bond issued by Zen Corp. with a time to maturity of 8 years. You paid a price of $895.15 for each $1000 face value of the bond. What was the yield to maturity on the bond at the time of your purchase?

9.61%

11.08%

8.80%

7.93%

10.27%

Recall the Zen Corp. bond that you purchased three years ago. It had a 7% coupon, paid interest semiannually, and had 8 years left to maturity at the time your bought it. You paid a price of $895.15 for each $1000 face value of the bond. Today, the yield on that bond is 80 basis points lower than when you purchased the bond, and you sell the bond now. Find the price at which you sell the bond.

$973.79

$920.00

$959.44

$941.73

$818.15

Recall the Zen Corp. bond that you purchased three years ago. It had a 7% coupon, paid interest semiannually, and had 8 years left to maturity at the time your bought it. You paid a price of $895.15 for each $1000 face value of the bond. Today, the yield on that bond is 80 basis points lower than when you purchased the bond, and you sell the bond now. Find your realized rate of return on this bond investment.

11.08%

7.76%

9.61%

9.81%

8.92%

A company has just paid out a per-share dividend of $3.80 on its common stock. Analysts expect the company's earnings and dividends to grow at a constant rate of 3.25% for the foreseeable future. If investors require a return of 8% on this stock, what should each share of the stock be selling for today?

$49.01

$47.47

$80.00

$58.19

$82.60