Answer the following questions:
Chapter 5 – Question 1- 40 points
1. Zang international Chinese chemical company has a 15% annual coupon interest rate on a $1,000 par value bond with 20 years left to maturity. Bonds of same maturity now sell to yield 11% return.
How much would you be willing to pay for one of these bonds today? Why?
If the bond is selling for $ 1,141 what is the yield to maturity?
Explain why some bonds sell at a premium over par value while other bonds sell at a discount. What do you know about the relationship between the coupon rate and the YTM for premium bonds? What about for discount bonds? For bonds selling at par value?
Chapter 6 (Stocks) – Question 2 – 60 points
NOTE YOU MUST SHOW HOW YOU ARRIVED AT YOUR ANSWERS:
2a. John’s company’s just paid a dividend of $2.40 per share on its stock and the dividends are expected to grow at a constant rate of 5% per year. If the required rate of return on this stock is 12%, what is value of this stock?
2b. Thomas Brothers stock is selling for $6.25 per share and it is expected to pay a $.50 per share dividend at the end of the year. The dividend of the stock is expected to grow at a constant rate of 7% per year. What is expected rate of return on the stock ?
2c. Johnson Manufacturing is expected to pay a dividend of $1.25 per share at the end of the year (D1 = $1.25). The stock sells for $32.50 per share, and its required rate of return is 10.5%. The dividend is expected to grow at some constant rate, g, forever. What is the equilibrium expected growth rate?
Plagiarism Free Papers
All our papers are original and written from scratch. We will email you a plagiarism report alongside your completed paper once done.
All papers are submitted ahead of time. We do this to allow you time to point out any area you would need revision on, and help you for free.
A title page preceeds all your paper content. Here, you put all your personal information and this we give out for free.
Without a reference/bibliography page, any academic paper is incomplete and doesnt qualify for grading. We also offer this for free.
Originality & Security
At Homework Valley, we take confidentiality seriously and all your personal information is stored safely and do not share it with third parties for any reasons whatsoever. Our work is original and we send plagiarism reports alongside every paper.
24/7 Customer Support
Our agents are online 24/7. Feel free to contact us through email or talk to our live agents.
Try it now!
How it works?
Follow these simple steps to get your paper done
Place your order
Fill in the order form and provide all details of your assignment.
Proceed with the payment
Choose the payment system that suits you most.
Receive the final file
Once your paper is ready, we will email it to you.
We work around the clock to see best customer experience.
Our prices are pocket friendly and you can do partial payments. When that is not enough, we have a free enquiry service.
Admission help & Client-Writer Contact
When you need to elaborate something further to your writer, we provide that button.
We take deadlines seriously and our papers are submitted ahead of time. We are happy to assist you in case of any adjustments needed.
Your feedback, good or bad is of great concern to us and we take it very seriously. We are, therefore, constantly adjusting our policies to ensure best customer/writer experience.