Question

Problem 4-7
Bond Valuation with Semiannual Payments

Renfro Rentals has issued bonds that have a 6% coupon rate, payable semiannually. The bonds mature in 12 years, have a face value of $1,000, and a yield to maturity of 8.5%. What is the price of the bonds? Round your answer to the nearest cent.

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Problem 8-11
Declining Growth Stock Valuation

Brushy Mountain Mining Company's coal reserves are being depleted, so its sales are falling. Also, environmental costs increase each year, so its costs are rising. As a result, the company's earnings and dividends are declining at the constant rate of 5% per year. If D0 = $5 and rs = 18%, what is the estimated value of Brushy Mountain's stock? Round your answer to the nearest cent.

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Problem 4-2
Yield to Maturity for Annual Payments

Wilson Wonders' bonds have 15 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 12%. The bonds sell at a price of $1,100. What is their yield to maturity? Round your answer to two decimal places.

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Answer 1