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Requirement-A. 5 million 12.4 per cent preference shares of BOOM Ltd were issued for $7 million. Currently market is expecting 18.2 per cent return from

Requirement-A. 5 million 12.4 per cent preference shares of BOOM Ltd were issued for $7 million. Currently market is expecting 18.2 per cent return from similar risky preference shares. If the company wants to buy back all of its 5 million preference shares from the market by paying 14 per cent premium to the current market price, how much fund would be required by BOOM Ltd for this purpose?

Requirement-B. Current 9% bond of ROOM Ltd pays coupon quarterly. This $2,000 par value, 28-year bond was issues 5 years ago. Current market yield for similar risky bond is 13%. What would be the expected market price for this bond?

Requirement-C. 10.6 per cent semi-annual coupon paying bond of ZOOM Ltd will mature after 11 years. The bond will return $1,000 at maturity and currently selling at $1,118.26. Calculate the yield to maturity for this bond.

Requirement-D. Analysts anticipate that the earnings and dividends of LOOM Ltd share will grow at 16 per cent for the next 4 years before settling down to a constant 5.2% growth rate. Market expects 12.9 per cent returns from this LOOM share that has just declared a dividend of $2.13 per share. What price is expected for LOOM share by the analysts?

Requirement-E. Share price of DOOM Ltd decreased from $6.00 to $4.90 in one year. DOOM Ltd paid $0.39 dividend per share at the end of the year. Find dividend yield and capital gain yield from DOOM share in that year.

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