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The Finance concept of Stocks and Bonds Valuation needs to applied, when answering the questions. Q 1 JW Corp has paid a dividend of $0.50.


 

 

The Finance concept of Stocks and Bonds Valuation needs to applied, when answering the questions.

Q 1 JW Corp has paid a dividend of $0.50. The dividend is expected to grow at a 6% rate over time. Based on the stock's risk, investors require an 11-percent rate of return. Using the constant dividend growth model, what should the stock's price be?
Q 2 Lerman Company has preferred stock outstanding. It pays an annual dividend of $10. If its current price is $70, what is the discount rate investors are using to value the stock?
Q 3 The French Thaler and Company's stock has paid dividends of $1.60 over the past 12 months. Its historical growth rate of dividends has been 8 percent but analysts expect the growth to slow to 5 percent annually for the foreseeable future. Determine the value of the stock if the required rate of return on stocks of similar risk is 15 percent.
Q 4 A $1,000 face value bond issued by the Dysane Company currently pays total annual coupon of $79 per year and has a 13-year life. What is the present value, or worth, of this bond if investors are currently willing to accept a 10 percent annual rate of return on bonds of similar quality if the bond is a Eurobond?
Q 5 How would your answer in Question 4 change if the bond is a U.S. bond?

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