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Some of the local licensed stockbrokers offer investors the opportunity to invest in international equities. In an effort to have a diversified portfolio, you are
Some of the local licensed stockbrokers offer investors the opportunity to invest in international equities. In an effort to have a diversified portfolio, you are considering investing in a few stocks that are traded in the United States. You intend to purchase the common shares of Estee Lauder, a company you're familiar with. The company just paid a dividend of $10.00, which will increase by 15%,20%,25% over the next over the next 3 years, with the growth rate tapering to a constant 4% annually thereafter. If your required return is 12%, how much should you pay for a share of Estee Lauder today?? 1. Identify the following key terms of this bond issue: i. Face Value or Issue Size ii. Coupon Rate iii. Issue Date iv. Issuer v. Maturity Date vi. Time to Maturity or Tenor (at date of issue) Based on the Auction Results, the bonds were issued at a yield (YTM) of 4.75%, with a price of $977.30 (per $1,000 face value). Using your knowledge of bond calculations, prove the accuracy of: i. The Bond Price (based on the YTM of 4.75% ) 7 Marks ii. The Yield to Maturity (based on the price of \$977.30). 5 Marks NOTE: To prove the accuracy you must compute the bond price and YTM given the information provided. Some of the local licensed stockbrokers offer investors the opportunity to invest in international equities. In an effort to have a diversified portfolio, you are considering investing in a few stocks that are traded in the United States. You intend to purchase the common shares of Estee Lauder, a company you're familiar with. The company just paid a dividend of $10.00, which will increase by 15%,20%,25% over the next over the next 3 years, with the growth rate tapering to a constant 4% annually thereafter. If your required return is 12%, how much should you pay for a share of Estee Lauder today?? 1. Identify the following key terms of this bond issue: i. Face Value or Issue Size ii. Coupon Rate iii. Issue Date iv. Issuer v. Maturity Date vi. Time to Maturity or Tenor (at date of issue) Based on the Auction Results, the bonds were issued at a yield (YTM) of 4.75%, with a price of $977.30 (per $1,000 face value). Using your knowledge of bond calculations, prove the accuracy of: i. The Bond Price (based on the YTM of 4.75% ) 7 Marks ii. The Yield to Maturity (based on the price of \$977.30). 5 Marks NOTE: To prove the accuracy you must compute the bond price and YTM given the information provided
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