Question
You bought a 90-day bank bill 30 days ago. The face value of the bill is $100,000. The yield on this bill was 5% per
You bought a 90-day bank bill 30 days ago. The face value of the bill is $100,000. The yield on this bill was 5% per annum. Today, when you sell the bank bill, the yield has increased to 6%. What is your return holding the bank bill?
Altus Ltd has issued a bond with 10-year maturity (matures end of December 2030) and a face value of $1000. The coupon rate is 5%, paid semi-annually. Assume the required yield to maturity is 6%, what is the bond price at the end of June 2023 (after coupon has been paid)?
Harvey’s Ltd has just paid a dividend of $3 per share and is expected to increase the dividend to $5 per share for the next four years. After that, the dividend is expected to grow at 4% per year. If the cost of equity is 10%, how much will you pay for a share today?
Step by Step Solution
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Step: 1
1 To calculate the return on the bank bill we need to consider the difference in yields and the holding period The initial yield on the bank bill was 5 per annum which means the 90day bill would have ...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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