Unformatted text preview: 3. Corporate bonds pay semi-annual coupons (so assume semi-annual coupon payments unless stated otherwise). 4. The face value of a bond is $1,000. 5. Duration is measured in years. 6. The price of the stock is the present value of all future dividends (D 1 , D 2 etc.) and it does not include the dividend just paid, i.e. it does not include D . This is often referred to as the stock price being ex-dividend. (Also, for simplicity, we assume that dividends are paid annually.) 1...
View Full Document
- Fall '10
- Finance, CCA, semi-annually compounded APR