MA 373 F10 Quiz 5

MA 373 F10 Quiz 5 - will be 103 of the dividend in the...

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Quiz 5 Math 373 November 2, 2010 1. Li Life Insurance Company sells preferred stock with a quarterly dividend of 6.50. The next dividend is payable in 3 months. Calculate the price of the preferred stock using an annual effective yield of 12%.
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2. The common stock of Smith Industries just paid a dividend of 10. The next dividend is due in 3 months and dividends are paid quarterly. Dividends are expected to increase by 3% each quarter. In other the dividend in a given quarter
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Unformatted text preview: will be 103% of the dividend in the prior quarter. Calculate the price of the common stock to yield 20% compounded quarterly. 3. A 10 year callable bond is purchased to yield an annual effective rate of 8%. The bond matures for 10,000 and has annual coupons of 900. The bond is callable as follows: Call Date Call Value End of 6 Years 10,300 End of 7 Years 10,250 End of 8 Years 10,200 End of 9 Years 10,100 Calculate the price of the bond....
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MA 373 F10 Quiz 5 - will be 103 of the dividend in the...

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