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Bond Pricing - ='w ‘17‘5 at New :3 n J-“ O 063...

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Unformatted text preview: =- 'w ‘17‘5 at. New » :3 - n J-“ O 063:) x \OCJCJ ’ gfikfi5¥ 5? 6.25% and face value of $1,000 e bond’s yield to maturity if the :5 l3 Hm: owl E'rvcr Pmblem 3. A 10-year maturity bond with a coupon rate of makes semi-annual coupon payments. What is th bond is selling for: *Tln (a) 900? { _i _> YQLW- 'l'C- [Y‘ai‘m‘i 1 ~; >;: L 3.95 3.905 ‘ tang}; = (TX—fir)‘ + (Hr) :YEELD(DATE{:§5'3’ 1, \>I§ATE(&OC13! m}! C\o, EGO, a: J m» W‘Mifiu imam—M... __‘._—'-=*‘ V" , V » a , ‘7, ’\ 7. r: a 159.5“ ' \ol £521: Cs:2..~i-:fl\”"-Cv (MI 000, 6 Mafia, m 6w , I i 2 » ~~ r I a n . 2 . ; 'FL ‘: yifislc“. *lc h‘w‘lU‘. '- \f" . V hr. (c) 1,100? , _, WM 46 [110.“qu {if :2 J. 7N3 5. Below are the data for two stocks, both of which have a discount rate of 10 w Stock A Stock B :4" 3 C, " i“ v.» 12 haw . ._"::' 1' ' n I: LIMA aft-E ‘ a ‘ ‘ t "r Return on equity 14% 12% Earnings per share $1.10 $2.20 Dividends per share $ .45 $1.50 {(3.4 a. What are the dividend payout ratios for each firm? ' gr:- E'mzwd ’ ’ - ' x I [—{eflZ QQWU; $5335 f , , s I d T, _ ‘ 1 Dix/laws. \suymn‘. .3514» (1:: 1,1,; x}: b. What are the expected dividend growth rates for each firm? *F ~: w . .' ' YLJ % ,. I , ‘ .. l! ' 's ‘. f: , w. \ aux :Kr-x '/ {Abbi/(45‘ \o‘Jno 7; \ -— Pmyom m:— (Kg. ‘ t‘r-;' t'a ‘: B. { Hafin“ 5 ' —" aim}; b—Eo‘n Aswa. up: - . - P ycyak 5:6“O~é?gy " g * c. What is the estimated stock price for each firm? ‘3' ’} EATS: ...C \A r. “(M d. Which stock has the higher market value of equity? . \ J’i“ , ‘ _. , v “‘5; ,“ r \ v. . EH 17.2.3. ~§ \ I», '_v v ‘| .7 ‘ " l- 7 v n i ‘a. qr ,’ 'WHJWA law b . T g ., ... . I :V. \I z: k“ ‘U A. Ml: w“ 1 ...
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