A $1,000 par value 8-year bond with a 13 percent coupon rate recently sold for $980....

A $1,000 par value 8-year bond with a 13 percent coupon rate recently sold for $980. What is the yield to maturity if the bond makes semiannual payments? Submit your answer as a percentage rounded to two decimal places.
1. Describe and interpret the assumptions related to the problem.
2. Apply the appropriate mathematical model to solve the problem.
3. Calculate the correct solution to the problem.

Consider a 7 year bond with face value $1,000 that pays an 8.4% coupon semi-annually and has a yield-to-maturity of 6.9%. What is the approximate percentage change in the price of bond if interest rates in the economy are expected to increase by 0.40% per year? Submit your answer as a percentage and round to two decimal places. (Hint: What is the expected price of the bond before and after the change in interest rates?)
1. Describe and interpret the assumptions related to the problem.
2. Apply the appropriate mathematical model to solve the problem.
3. Calculate the correct solution to the problem.

ABC, Inc. expects its current annual $30 per share common stock dividend to remain the same for the foreseeable future. What is the intrinsic value of the stock to an investor with a required return of 9.2%? Round to two decimal places.
1. Describe and interpret the assumptions related to the problem.
2. Apply the appropriate mathematical model to solve the problem.
3. Calculate the correct solution to the problem.

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jeff jeffy answered 1 year ago

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