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Unformatted text preview: dividend being 10 payable in three months. Each dividend is expected to be 1% greater than the prior dividend. In other words, the dividend in 6 months is expected to be 10(1.01), the dividend in 9 months is expected to be 10(1.01) 2 , etc. Determine the price of this stock using the dividend discount method with a yield of 10% convertible quarterly. 4. You are given the following spot yield curve: Time Spot Rate 1.0% 1 1.5% 1 2.0% 2 2.5% 2 3.0% 3 4.0% 3 5.0% 4 6.0% Determine the price and the annual yield rate of a 3 year bond which matures for 1500 with annual coupons of 100....
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 Spring '08
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 Math

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