Question
Requirement-A. CTR Ltd issued a corporate bond 5 years ago. This 24-year 10.1 percent bond was issued at a par value of $1000. Coupons are
Requirement-A.CTR Ltd issued a corporate bond 5 years ago. This 24-year 10.1 percent bond was issued at a par value of $1000. Coupons are paid semi-annually. The bond is currently selling at $822.88. Calculate the currentyield to maturityfor 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 8 years and the coupon is paid quarterly. The current market yield for a similar risky bond is 14.80%. What would be the expected market price for this bond?<1 mark>
Requirement-C.The market expects 14.8 percent returns from the ordinary shares of ETR Ltd, which has just declared a dividend of $2.20 per share. It is anticipated that the earnings and dividends of ETR Ltd share will grow at 22 percent for the next 3 years before settling down to a constant 4.9% growth rate. What price is expected for ETR share by the investors?<1 mark>
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started