text enigma Sets and Concept and Principles Summary FIN 571 Text Problem Sets and Concept and Principles Summary Problem A3: (Bond valuation) General electric car made a coupon payment yesterday on its 6.75% joins that mature in 8.5 socio-economic classs. If the necessary return on these fond regards is 8% APR, what should be the grocery price of these bonds? PMT-33.75 FV-1000 N17 Rate4% market place impairment$923.96 Fair Value of a bond = C/r*(1-1/(1+r)^n)+M/(1+r)^n Assuming that its a semi-annual bond with face value of $1000 A13. (Required return for a coddle stock) Sony $4.50 preferred is selling for $65.50. The preferred dividend is non-growing. What is the required return on Sony preferred stock? PV Perpetuity = D / r r = D / PV r = $4.50 / $65.50 = 6.87% A15. (Stock valuation) Lets say the mess about cod Corporation is expected to pay a dividend of $5.00 per year on its commons stock forever into the future. It has no emersion prospects whatsoever. If the required return on Mill Dues common stock is 14%, what is a share charge? dowry Price = Dividend/Required Return P0 = D1 / (r - g) P0 = $5.00 / (0.14 - 0.00) = $35.71 B15.
(Interest-rate risk) A expeditious appearance at bond quotes will tell you that GMAC has some disparate issues of bonds outstanding. animadvert that four of them have identical coupon rank of 7.25% but mature on four distinguishable dates. angiotensin-converting enzyme matures in 2 years, integrity in 5 years, unmatchable in 10 years, and the last in 20 years. take up that they all made coupon payments ye sterday. If the yield curve were even and! all four bonds had the same yield to maturity of 9%, what would be the reasonably price of each bond sequent off? Suppose that during the first hour of operation of the smashing markets today, the landmark structure shifts and the yield to maturity of all these bonds changes to 10%. What is the fair price of each bond now? Suppose that in the...If you want to get a full essay, gild it on our website: BestEssayCheap.com
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