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Question 19 (6 points) Answer the following questions for Athabasca Inc. Each question is separate. a. Athabasca Inc. issued 8%, $100 par value preferred stock
Question 19 (6 points) Answer the following questions for Athabasca Inc. Each question is separate. a. Athabasca Inc. issued 8%, $100 par value preferred stock 10 years ago. If the preferred stock currently yields 10.67%, what is the current price of the preferred stock? (2 marks) b. Athabasca Inc. has a 10 percent coupon bond on the market that has 8 years left to maturity. If the Yield to Maturity on these bonds is 7 percent, what is the current price bond price (2 marks) C. Athabasca Inc. issued 7,400,000 common shares 11 year ago. The company's most recent dividend payment was $2.50, and they expect to increase the dividend by 3% each year. If the beta for the company is 1.25, and the required rate of return for investors is 11%, what is your best estimate of the current price of Athabasca's common stock? (2 marks)
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