In: Finance
1. Calculate the current bond value of the following bond: it has a par value of $1000 with a coupon rate of 8% paid annually and matures in 5 years. The required return is 4%.
1178.07
1386.09
2465.78
2651.46
2.Assume that a stock has the same dividend paid in perpetuity. Find the value of the stock with a $3 annual dividend if the required return is 2%.
2.94
3.06
150
1500
3.Company X’s most recent dividends were $1 per share last year and $1.05 this year. Assuming a constant rate of growth and a required return of 7%, find the value of X’s common stock.
52.5
55.13
1.05
15