Homework Answers
5.
Let the face value of stock be $1000.
The coupon payments will be of $80.
The current price for the stock can be calculated with the help of below expression:
The current price is calculated below:
Thus, an investor can pay $1,333.33 to buy the stock.
The expected price after 1 year will be:
Add Answer to:
formula + answer (no tables)
5. The stock pays 8% coupon constantly forever, your required rate...
A bond pays coupon payment of $100 per year and continue forever, required rate of return...
A bond pays coupon payment of $100 per year and continue forever, required rate of return is 10% and the growth rate of cash flow is 5%. What’s the value of this bond? You should provide all the calculation process and formulas.
A stock is expected to pay annual dividends forever. The first dividend is expected in 1...
A stock is expected to pay annual dividends forever. The first dividend is expected in 1 year and all subsequent annual dividends are expected to grow at a constant rate annually. The dividend expected in 2 years from today is 19.55 dollars and the dividend expected in 13 years from today is expected to be 30.03 dollars. What is the dividend expected to be in 8 years from today? Number If 1) the expected return for Litchfield Design stock is...
Dick's Co Pays an annual dividend of $6 to its preferred stock. The rate of return...
Dick's Co Pays an annual dividend of $6 to its preferred stock. The rate of return on T-Bill is 3% and the market risk premium is 8%. What is the intrinsic value of the preferred stock if the beta of the preferred stock is 1.257 Mountain Development Corporation is expected to pay a dividend of $3.00 in the upcoming year. Predicted to grow at the rate of 8% per year. The firms market capitalization rate is 14%. Using the constant...
33. A stock is expected to pay annual dividends forever. The first dividend is expected in...
33. A stock is expected to pay annual dividends forever. The first dividend is expected in 1 year and all subsequent annual dividends are expected to grow at a constant rate annually. The dividend expected in 3 years from today is 15.18 dollars and the dividend expected in 12 years from today is expected to be 24.27 dollars. What is the dividend expected to be in 8 years from today
1. What is the yield to maturity of a bond that pays 12% coupon rate with...
1. What is the yield to maturity of a bond that pays 12% coupon rate with semi-annual coupon payments, has a par value of $1,000, matures in 9 years, and is currently selling for $897? a) 14.05% b) 11.90% c) 7.03% d) 12.97% 2. a company just paid a dividend of $1.25, and those dividends are expected to grow at a constant rate of 5% forever. If the required return of the investors is 11%, what is the stock price...
A $1,000 par value bond’s coupon rate is 4 percent per year but it pays coupon...
A $1,000 par value bond’s coupon rate is 4 percent per year but it pays coupon twice a year. The yield to maturity is 6 percent p.a. and it has 10 years to maturity. If the yield to maturity remains unchanged, what is the price 3 years from now? (please round to cent) A $1,000 par value bond’s coupon rate is 4 percent per year but it pays coupon twice a year. The yield to maturity is 6 percent p.a....
. Kicssling Corp. pays a constant S9 dividend on its stock. The company will maintain this...
. Kicssling Corp. pays a constant S9 dividend on its stock. The company will maintain this dividend for the next eight years and will then cease paying dividends forever. If the required return on this stock is 11 percent, what is the current share price? 1. Metallica Bearings, Inc. is a young start-up company. No dividends will be paid on the stock over the next nine years, because the first needs to plow back its carnings to fuel growth. The...
1.Golf World has a constant dividend growth rate of 10% and has just paid a dividend (D0) of $5.00. If the required rate...
1.Golf World has a constant dividend growth rate of 10% and has just paid a dividend (D0) of $5.00. If the required rate of return is 15%, what will the stock sell for one year from now? A) $90.00 B) $95.50 C) $ 100.00 D) $121.00 2.The dividend yield on AAA’s common stock is 5%. The company just paid a $4 dividend (D0), which will be $4.40 next year. The dividend growth rate (g) is expected to remain constant at...
Question 2 10 pts A stock pays dividends annually. It just paid a dividend of $5...
Question 2 10 pts A stock pays dividends annually. It just paid a dividend of $5 that is expected to grow at a constant rate of 4% forever. Assuming a required rate of return of 13%, what is the value of the stock using the constant growth model? Note: Show your answer in units of dollars, use plain numbers with at least two digits after the decimal (e.g., for $12,345.67, type 12345.67).
1. A corporate bond has a 12 percent coupon, pays interest semiannually, and matures in 10...
1. A corporate bond has a 12 percent coupon, pays interest semiannually, and matures in 10 years at $1,000. If the investor's required rate of return is 14 percent, what should the current market price of the bonds be? 2. North Pole Air has an issue of preferred stock outstanding that pays dividends of $8.50 annually. The par value of each preferred share is $100. Investors require a 12.25 percent rate of return on this stock. The next annual dividend...
A stock is expected to pay annual dividends forever. The first dividend is expected in 1 year and all subsequent annual dividends are expected to grow at a constant rate annually. The dividend expected in 2 years from today is 19.55 dollars and the dividend expected in 13 years from today is expected to be 30.03 dollars. What is the dividend expected to be in 8 years from today? Number If 1) the expected return for Litchfield Design stock is...
Dick's Co Pays an annual dividend of $6 to its preferred stock. The rate of return on T-Bill is 3% and the market risk premium is 8%. What is the intrinsic value of the preferred stock if the beta of the preferred stock is 1.257 Mountain Development Corporation is expected to pay a dividend of $3.00 in the upcoming year. Predicted to grow at the rate of 8% per year. The firms market capitalization rate is 14%. Using the constant...
1. What is the yield to maturity of a bond that pays 12% coupon rate with semi-annual coupon payments, has a par value of $1,000, matures in 9 years, and is currently selling for $897? a) 14.05% b) 11.90% c) 7.03% d) 12.97% 2. a company just paid a dividend of $1.25, and those dividends are expected to grow at a constant rate of 5% forever. If the required return of the investors is 11%, what is the stock price...
. Kicssling Corp. pays a constant S9 dividend on its stock. The company will maintain this dividend for the next eight years and will then cease paying dividends forever. If the required return on this stock is 11 percent, what is the current share price? 1. Metallica Bearings, Inc. is a young start-up company. No dividends will be paid on the stock over the next nine years, because the first needs to plow back its carnings to fuel growth. The...
Question 2 10 pts A stock pays dividends annually. It just paid a dividend of $5 that is expected to grow at a constant rate of 4% forever. Assuming a required rate of return of 13%, what is the value of the stock using the constant growth model? Note: Show your answer in units of dollars, use plain numbers with at least two digits after the decimal (e.g., for $12,345.67, type 12345.67).
1. A corporate bond has a 12 percent coupon, pays interest semiannually, and matures in 10 years at $1,000. If the investor's required rate of return is 14 percent, what should the current market price of the bonds be? 2. North Pole Air has an issue of preferred stock outstanding that pays dividends of $8.50 annually. The par value of each preferred share is $100. Investors require a 12.25 percent rate of return on this stock. The next annual dividend...
Most questions answered within 3 hours.
-
Roybus, Inc., a manufacturer of flash memory, just reported that
its main production facility in Taiwan...
asked 5 minutes ago -
Two capacitors connected in parallel produce an equivalent
capacitance of 45.0 μF but when connected in...
asked 14 minutes ago -
The differences between the two sets of dependent data are -1,
2,-,2, 2. Round to the...
asked 31 minutes ago -
A χ2-curve, looking at the relationship between age and hours
spent working at an office per...
asked 1 hour ago -
The pH of a sample of water from a river is 5.0. A
sample of effluent from...
asked 1 hour ago -
At the beginning of the period, the Fabricating Department
budgeted direct labor of $136,500 and equipment...
asked 2 hours ago -
Please answer all
____ 28. Rent control is usually
justified on the grounds that it protects...
asked 2 hours ago -
PARTS A-D HAVE BEEN ANSWERED. WAS TOLD TO REPOST. ONLY ANSWER
PARTS E and F.
A...
asked 2 hours ago -
2) You are given the task of finding a representation for a
circle in a drawing...
asked 3 hours ago -
STUDY QUESTION: Does use of diet drug fen-phen
(fenfluramine-phentermine) cause valvular heart disease?
HINT: Valvular heart...
asked 3 hours ago -
1. An object weighing 40 N rests on a surface. The coefficient
of friction is 0.35....
asked 4 hours ago -
Investor company owns 35% of investee company voting stock and
accounts for the investment under the...
asked 5 hours ago