QUESTIONS 4 point You have funds that you want to invest in bonds, and you just noticed in the financial pages of the local newspaper that you can buy a $1,000 par value bond for $800. The coupon rate is 10% (with annual payments), and there are 10 years before the bond will mature and pay off its $1,000 par value. You should buy the bond if your required return on bonds (YTM) with this risk is 12% Why is this statement TRUE or FALSE? Explain! TTT Arial 3 (12pt) E Click Save and Submit to see and submit. Click Save All Anser to see all Save Al Answer Sor I 99 DOLL p Priser % & $ 4 07 O 9 8 7 3 5 E R T Y D F G CV B NM A stock is expected to pay a year-end dividend of $2.00, i.e. D1 = $2.00. The dividend is expected to decrease at a rate of 3% a year forever. Suppose the company is in equilibrium and its expected and required rate of return is 15%. Your father's friend tells your dad that the stock is offered at price of $12.67 and claims that it is a very cheap stock and he can make a good return. What would be your answer to your dad? (Recommend to buy it or not, Explain!) TTT Arial 3 [12pt) Click Save and Submit to save and submit Click Save All Answers to see all Save All Answers earch O RI DOLL 8 * $ % 5 01 7 8 2 3 4 P O W E R. T K S D F H G NM Alt QUESTION 10 6 pc Rocket Medical Devices Inc. is presently enjoying relatively high growth because of a surge in the demand for its new product Management expects earnings and dividends to grow at a rate of 20% for the next 3 years, after which competition will probably reduce the growth rate in earnings and dividends to 15% for the next two years, and then to a long-term growth of 3% forever. The company's last dividend, DO, was $0.80, its beta is 1.20, the market risk premium is 5.50%, and the risk-free rate is 2.00% What is the current fair market price of the common stock? Calculatel TTT Arial 3112pt] T.EE Click Save and submit to save and subunit. Click Save All Ants to see all answers Save All Answer arch DELL Priser WEL & @ # $ % 5 6 7 8 3 a C W E R Y T S D K F G HJ NM Alt