Chapter_05 - Chapter 5 Problems 1-40 Input boxes in tan...

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Unformatted text preview: Chapter 5 Problems 1-40 Input boxes in tan Output boxes in yellow Given data in blue Calculations in red Answers in green NOTE: Some functions used in these spreadsheets may require that the "Analysis ToolPak" or "Solver Add-in" be installed in Excel. To install these, click on "Tools|Add-Ins" and select "Analysis ToolPak" and "Solver Add-In." Chapter 5 Question 1 Input area: Years to maturity 10 Face value $1,000 a) Yield to maturity 5% b) Yield to maturity 10% c) Yield to maturity 15% Output area: a) Price $613.91 b) Price $385.54 c) Price $247.18 Chapter 5 Question 2 Input area: Settlement date 1/1/2006 Maturity date 1/1/2026 Annual coupon rate 8.00% Coupons per year 2 a) Yield to maturity 8% b) Yield to maturity 10% c) Yield to maturity 6% Output area: a) Price $1,000.00 b) Price $828.41 c) Price $1,231.15 Chapter 5 Question 3 Input area: Settlement date 1/1/2006 Maturity date 1/1/2016 Annual coupon rate 8.60% Coupons per year 2 Face value (% of par) 100 Bond price (% of par) 97 Output area: Yield to maturity = 9.06% Chapter 5 Question 4 Input area: Dividend paid $1.40 Dividend growth rate 6% Required return 12% # of years 0 Output area: Price $24.73 Chapter 5 Question 5 Input area: Dividend paid $3.10 Dividend growth rate 5% Stock price $48.00 Output area: Required return = 11.46% Chapter 5 Question 6 Input area: Dividend paid $3.60 Dividend growth rate 4.50% Required return 13% Output area: Price = $42.35 Chapter 5 Question 7 Input area: Stock price $70.00 Required return 12.0% Output area: Current dividend = $3.96 Chapter 5 Question 8 Input area: Current dividend $12.00 Required return 10.0% Years until dividend ceases 8 Output area: Share price = $64.02 Chapter 5 Question 9 Input area: Earnings $20,000,000 ROE 14% Retention ratio 60% Output area: Growth rate 8.40% Next year's earnings $21,680,000.00 Chapter 5 Question 10 Input area: Settlement date 01/01/06 Maturity date 01/01/19 Miller Corp. Coupon rate 8% Yield to maturity 6% Face value (% of par) 100 # of coupons per year 2 Modigliani Company Coupon rate 6% Yield to maturity 8% Face value (% of par) 100 # of coupons per year 2 Output area: Price of Miller bond $1,178.77 Price of Modigliani bond $840.17 All else held equal, the premium over par value for a premium bond declines as maturity approaches, and the discount from par value for a discount bond declines as maturity approaches. In both cases, the largest percentage price changes occur at the shortest maturity lengths. Chapter 5 Question 11 Input area: Settlement date 1/1/2006 Maturity date 1/1/2015 Annual coupon rate 8.4% Coupons per year 2 Face value (% of par) 100 Bond price (% of par) 104 Output area: Current yield = 8.08% Yield to maturity = 7.77% Effective annual rate = 7.92% Chapter 5 Question 12 Input area: Settlement date 1/1/2006 Maturity date 1/1/2026 Annual coupon rate 8% Coupons per year 2 Face value (% of par) 100 Bond price (% of par) 109.5 Output area: Yield to maturity = 7.10% Chapter 5 Question 13 Input area: Dividend paid...
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Chapter_05 - Chapter 5 Problems 1-40 Input boxes in tan...

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