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14.54%
Dizzy Corp. bonds, with a coupon rate of 12% paid semiannually, have 3 years remaining to maturity, and are currently priced at $939.97 per bond. What is the yield to maturity? (assume the bonds have a par value of $1,000).
Bond A by $20.86
Bond A has a market price of $960, a yield to maturity of 10%, and a maturity of 5 years. Bond A pays coupon semi-annually. Bond B has a current price of $1010, a yield to maturity of 6.5%, and 3 years to maturity. Bond B makes coupon payments annually. Which bond has higher annual coupon payments and by how much? (please chose the closest answer).
14%
What is the required return for a stock that has a 6% constant-growth rate, a price of $25, an expected dividend of $2 next year, and a P/E ratio of 10?
If a stock's dividend is expected to grow at a constant rate, then the growth rate of its price (price appreciation or capital gain) is exactly the same as the growth rate of its dividends
Which of the following statements is true?
bond is traded at a market price of less than $1,000.
A year ago a company issued a bond with a face value of $1,000 with an 8% coupon. Now the prevailing market yield is 10%. What happens to the bond? The…
Below par
A bond that has a "yield to maturity" greater than its coupon interest rate will sell for a price…
62.50
What is the value of a preferred stock that is expected to pay a $5.00 annual dividend per year forever if similar risk securities are now yielding 8%?
Y is trading at a discount and Z is trading at a premium.
Two bonds, both with face value of $1,000, are being evaluated. Bond Y is currently trading for $980, and Bond Z is trading for $1,250. What must be true of these bond investments?
$30.00
Assume that a share of common stock has just paid a dividend (Do) of $2.00. Also assume that investors expect this stock to have a long-run sustainable growth rate of 5 percent and that they require an annual rate of return of 12%. Determine the current price of this stock.
$37.39
ABC common stock is expected to have extraordinary growth of 20% per year for 2 years, at which time the growth rate will settle into a constant 6%. If the discount rate is 15% and the most recent dividend was $2.50, what should be the approximate current share price? (round to the nearest cent)
BB+
The highest S&P bond rating category considered to be of junk quality grade is…
6 years
The Douglas Dynamics Corporation issued a bond years ago with a $1,000 par value and a 15% annual coupon (paid annually). The bond had a maturity of 20 years when originally issued. The bond is priced at $938.45 today with a yield to maturity of 16.70%. How many years are left to maturity?
value of future benefits (i.e., cash flows) to the holder.
The value of a common stock is based on its…
Yes, the bond is undervalued by about $64
Consider a 6-year $1,000 par bond priced at $1,011. The coupon rate is 7.5% paid semiannually. Six-year bonds with comparable credit quality have a yield to maturity (YTM) of 6%. Should an investor purchase this bond?
1068.72
Interest rates have fallen over the seven years since a $1,000 par, 10-year bond was issued with a coupon of 7%. What is the present value of this bond if the required rate of return is currently 4.5%? (For simplicity, assume annual coupon payments.)
