Mathematics

Round 8

#3Homework #4D (YTM annually, semi-annually)

Fresh Fruit, Inc. has a $1,000 par value bond that is currently selling for $788. It has an annual coupon rate of 10.71 percent, paid semiannually, and has 30-years remaining until maturity. What would the annual yield to maturity be on the bond if you purchased the bond today and held it until maturity?

Round the answer to two decimal places in percentage form. (Write the percentage sign in the “units” box)

You should use Excel or financial calculator.

 

Your Answer:

#4Homework #4E (zero-coupon bond)

27 years ago, Mini Max Inc. issued 30 year to maturity zero-coupon bonds with a par value of $1,000. Now the bond has a yield to maturity of 12.27 percent, compounded semi-annually. What is the current price of the bond?

Round the answer to two decimal places.

Your Answer:

 

 

Company  

Price

 

Coupon Rate

Maturity Date  

YTM

Current Yield  

Rating

Fresh Bakery 86.237 8.108 04-15- 2032 ? AA

Your Answer:

#7 Homework #5A (Value and Expected rate of return on preferred stock)

Giant Co. has just issued preferred stock with a par value of $100 and an annual dividend rate of 8.66 percent. If your required rate of return is 10.62 percent, how much will you be willing to pay for one share of this preferred stock?

Round the answer to two decimal places.

Your Answer

#8Homewok #5B (Value of Common Stock, Expected Rate of return on Common Stock)

Green Company’s common stock is currently selling for $80.88 per share. Last year, the company paid dividends of $1.80 per share. The projected growth at a rate of dividends for this stock is 7.42 percent. Which rate of return does the investor expect to receive on this stock if it is purchased today?

Round the answer to two decimal places in percentage form. (Write the percentage sign in the “units” box).

Your Answer:

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