Read Only - You can't save changes to t... Business Finance FINC 2101 Assignment 4 Fall 2019 Question 1: You have just noticed in the financial pages of the local newspaper that you can buy a bond ($1,000 par) for $800. If the coupon rate is 10 percent, with annual interest payments, and there are 10 years to maturity, should you make the purchase if your required return on investments of this type is 12 percent? Question 2: Tony's Pizzeria plans to issue bonds with a par value of $1,000 and 10 years to maturity. These bonds will pay $45 interest every 6 months. Current market conditions are such that the bonds will be sold to net $937.79 What is the YTM of the issue as a broker would quote it to an investor? Question 3: A coupon bond which pays interest annually has a par value of $1,000, matures in 4 years, and has a yield to maturity of 6%. If the coupon rate price 7%, what the of bond today? is is the Question 4: A bond has a maturity date of 10 years and the following features Par value $1000,Annual interest $50.What is the yield to maturity if the current price is $743.3 Question 5:The last dividend on Spirex Corporation's common stock was $4.00, and the expected growth rate is 10 percent. If you require a rate of return of 20 percent, what is the highest price you should be willing to pay for this stock? Question 6 A the start of the month, you have LE 4700 invested in CIB LE3100 in Egyptian Resort Company and LE 2200 in Sedi Kerir Petrochemicals. If you expect returns over the next month of 1 %,2 % and 1.5% respectively on these three assets, what returm would you expect on the portfolio of the three? Question 7:lf a preferred stock pays an annual $4.50 dividend, what should be the price of the stock if comparable yields are 10 percent? Question 8:Calculate the required rate of return for Mobinil 's stock. The covariance between the total returns on the market and the stock equals 0.05, and the variance of the market is 0.03.The rate on a T- bill is 0.08, the average annual return on the market is 0.36 Question 9: Newman Manufacturing is considered a cash purchase of a stock of Grips Tool. During the year just completed dividends are 2.55 per share(D0-2.55).Grips earnings and dividends are expected to grow at 25 % per year for the next 3 years, after which they are expected to grow at10% per year to infinity. What is the maximum price per share that Newman should pay for Grips if it had a required return of 15% on investments with risk similar to the of Grips? Read Only - You can't save changes to t... Business Finance FINC 2101 Assignment 4 Fall 2019 Question 1: You have just noticed in the financial pages of the local newspaper that you can buy a bond ($1,000 par) for $800. If the coupon rate is 10 percent, with annual interest payments, and there are 10 years to maturity, should you make the purchase if your required return on investments of this type is 12 percent? Question 2: Tony's Pizzeria plans to issue bonds with a par value of $1,000 and 10 years to maturity. These bonds will pay $45 interest every 6 months. Current market conditions are such that the bonds will be sold to net $937.79 What is the YTM of the issue as a broker would quote it to an investor? Question 3: A coupon bond which pays interest annually has a par value of $1,000, matures in 4 years, and has a yield to maturity of 6%. If the coupon rate price 7%, what the of bond today? is is the Question 4: A bond has a maturity date of 10 years and the following features Par value $1000,Annual interest $50.What is the yield to maturity if the current price is $743.3 Question 5:The last dividend on Spirex Corporation's common stock was $4.00, and the expected growth rate is 10 percent. If you require a rate of return of 20 percent, what is the highest price you should be willing to pay for this stock? Question 6 A the start of the month, you have LE 4700 invested in CIB LE3100 in Egyptian Resort Company and LE 2200 in Sedi Kerir Petrochemicals. If you expect returns over the next month of 1 %,2 % and 1.5% respectively on these three assets, what returm would you expect on the portfolio of the three? Question 7:lf a preferred stock pays an annual $4.50 dividend, what should be the price of the stock if comparable yields are 10 percent? Question 8:Calculate the required rate of return for Mobinil 's stock. The covariance between the total returns on the market and the stock equals 0.05, and the variance of the market is 0.03.The rate on a T- bill is 0.08, the average annual return on the market is 0.36 Question 9: Newman Manufacturing is considered a cash purchase of a stock of Grips Tool. During the year just completed dividends are 2.55 per share(D0-2.55).Grips earnings and dividends are expected to grow at 25 % per year for the next 3 years, after which they are expected to grow at10% per year to infinity. What is the maximum price per share that Newman should pay for Grips if it had a required return of 15% on investments with risk similar to the of Grips