18-4 [5 pts] The Florida Investment Fund buys bonds of the Gator Corporation through a broker. The bonds pay 10 percent annual interest. The yield to maturity (market rate of interest) is 12 percent. The bonds have a 10-year maturity.
a. By how much did the company's retained earnings increase?
b. With 100 million shares outstanding and a stock price of $101, what was the dividend yield? (Hint: First compute dividends per share.)
a.The par value of bond $1,000 Price of Bond=C(1-(1+r) -n /r]+A(1+r) -n =12%*1000 (1-(1+.10) -10... View the full answer