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Finance Questions Assignment Solution...................




Question;QuestionRegatta, Inc., has seven-year bonds outstanding that pay a 13.59 percent coupon rate. Investors buying the bond today can expect to earn a yield- to- maturity of 11.91 percent. Assuming annual coupon payments, the current value of these bonds is $Yield to maturity:Rudy Sandberg wants to invest in four-year bonds that are currently priced at $750.89. These bonds have a coupon rate of 0.79 percent and pay semiannual coupons.The current market yield on this bond is %.Yield to maturity: Electrolex, Inc., has four-year bonds outstanding that pay a coupon rate of 11.28 percent semiannually. If these bonds are currently selling at $906.13, the yield to maturity that an investor can expect to earn on these bonds is % and the effective annual yield is %Constant growth: Moriband Corp. just declared a dividend of $2.28 yesterday. The company is expectedto grow at a steady rate of 5 percent for the next several years. If stocks such as these require a rate ofreturn of 17 percent, what should be the market value of this stock?Constant growth: Reco Corp. is expected to pay a dividend of $2.18 next year. The forecast for the stock price a year from now is $35.50. If the required rate of return is 18.5 percent, what is the current stock price? Assume constant growth.Preferred stock: The preferred stock of Axim Corp. is selling currently at $50.43. If your required rate of return is 12.0 percent, what is the dividend paid by this stock?Constant growth: Jenny Banks is interested in buying the stock of Fervan, Inc., which is growing at a constant rate of 8.0 percent. Last year, the firm paid a dividend of $2.65. Her required rate of return is 18.5 percent.a. What is the current price for this stock?(Round the value of the stock to the nearest penny, i.e., $14.75) P0 = $b. What would be the price of the stock in year 5?(Round the value of the stock to the nearest penny, i.e., $14.75) P5 = $


Paper#47607 | Written in 18-Jul-2015

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