Question

1. Yield to call on a bond with a coupon rate of 8% paid semi-annually, 10 years to maturity, a par value of $1,000 and a selling price of $1,071, callable after 5 years at $1,010 is

A) 3.5%.

B) 6.49%.

C) 7.0%.

D) 8.16%.

1. Maria purchased $5,000 of no-load mutual fund shares just over a year ago. She received $136 in dividend income and $201 in long-term capital gains distributions. Today she sold her shares for $5,062. Maria is in the 25% marginal tax bracket. Capital gains with holding periods in excess of one year and dividend income are taxed at 15%. What is Maria's after-tax holding period return?

A) 6.0%

B) 6.6%

C) 6.8%

D) 8.0%

1. The common shares of the Hiboux Ltd have a book value of $21.60 and a market value of $28.60. The company pays $0.28 in dividends each quarter. What is the dividend yield?

• 3.9%

• 4.5%

1. Westlake Industries has total assets of $42.5 million, total debt of $29.3 million, and $2.4 million of 6% preferred stock outstanding. If the company has 250,000 shares of common stock outstanding, its book value per share would be

• $43.20

• $46.78

Answer 1

K = Time to callx2

Bond Price =∑ [(Semi Annual Coupon)/(1 + YTC/2)^k]     +   Call Price/(1 + YTC/2)^Time to callx2

k=1

K =5x2

1071 =∑ [(8*1000/200)/(1 + YTC/200)^k]     +   1010/(1 + YTC/200)^5x2

k=1

YTC% = 6.49

Please ask remaining parts seperately, questions are unrelated