Question
Requirement-A. CTR Ltd issued a corporate bond 3 years ago. This 19-year 9.5 percent bond was issued at a par value of $1000. Coupons are
Requirement-A. CTR Ltd issued a corporate bond 3 years ago. This 19-year 9.5 percent bond was issued at a par value of $1000. Coupons are paid semi-annually. The bond is currently selling at $863.61. Calculate the current yield to maturity for this bond. <1 mark>
Requirement-B. The par value of the current 25-year 8% bond of PTR Ltd is $3,000. The bond has a remaining life of 9 years and the coupon is paid quarterly. The current market yield for a similar risky bond is 13.56%. What would be the expected market price for this bond? <1 mark>
Requirement-C. The market expects 11.1 percent returns from the ordinary shares of ETR Ltd, which has just declared a dividend of $2.66 per share. It is anticipated that the earnings and dividends of ETR Ltd share will grow at 16 percent for the next 2 years before settling down to a constant 4.8% growth rate. What price is expected for ETR share by the investors? <1 mark>
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