公司金融第二次作业.docx

公司金融第二次作业.docx - 叶芷欣 1602010411...

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叶芷欣 1602010411 邓博文 1300017659 杨明烨 1300017626 1 Consider the following two types of bonds: Bond A: A ten year zero coupon Bond Bond B: A ten year, 10% coupon bearing Bond, paying the coupon once every year. Both bonds have a face value of $1,000 and have a similar risk. For that reason the yield to maturity of both bonds is 9%. A What are the current prices of the above two types of bonds? For Bond A P A = 1000 1.09 10 422.41 dollars For Bond B: P B = 1000 10 A 9 10 + 1000 1.09 10 1064.18 dollars B Suppose that next year, when you plan to see the bonds, the yield to maturity of the bonds remains at 9%. What rate of return will each of the bonds generate over the year? Can you identify the current yield and the capital gains yield? For Bond A: P A = 1000 1.09 9 460.43 dollars capital gains yield A = 460.43 422.41 422.41 9 totalreturn A = capital gains yield A + current yield A = 9 For Bond B: P B = 1000 10 A 9 9 + 1000 1.09 9 1059.65 dollars capital gains yield B = 1059.65 1064.18 1064.18 0.4 current yield B = coupon 1064.18 = 9.4 totalreturn B = capital gains yield B + current yield B = 9 C Suppose instead that the yield to maturity of the bonds drops to 7% at the end of the year. Re- calculate the rates of return of each of the bonds. For Bond A: P A = 1000 1.07 9 543.93 dollars capital gains yield A = 543.93 422.41 422.41 28.77 totalreturn A = capital gains yield A + current yield A = 28.77 For Bond B: P B = 1000 10 A 7 9 + 1000 1.07 9 1195.45 dollars
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capital gains yield B = 1195.45 1064.18 1064.18 12.34 current yield B = coupon 1064.18 = 9.4 totalreturn B = capital gains yield B + current yield B = 21.74 2 Cogent Consultants expects to earn $8.46 per share next year, which, following past practice; it will pay out to shareholders as a cash dividend. The firm’s new CEO, however, would like to
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