1. You own a 25-year, $10,000 par value bond paying 11% interest annually. The market price of the bond is $8,750. Compute the bond's expected rate of return

2. ExxonMobil 15-year bonds pays 7% coupon interest rate annually on a Php 25,000 par value.In addition the required rate of return is 10%. What is the value of the bond?

3. Honeywag common stock is expected to pay $1.85 in dividends next year, and the growth rate is projected to be 5%. If investors require a rate of return of 11%, what is the current value of the stock?

4. The common stock of Corby Corporation paid $1.32 in dividends last year. Dividends are expected to grow at a 6% annual rate for an indefinite number of years. a) If Corby's current market price is $23.50 per share, what is the stock's expected rate of return?

5. relative to number 4 problem, b) If your required rate of return is 10.5%, what is the value of the stock for you?

6. How many months will it take to pay off a loan of $50,000 at an annual rate of 12% compounded monthly if you make monthly payment of $600?

7. You lend friend $10,000, for which your friend will repay you $27,027 at the end of 5 years. What interest rate are you charging your friend?

8. You are considering an investment security that will pay you $1,000 in 3 years. If the appropriate discount rate is 11%, what is the value of this investment today?

9. Mr. Preston purchased a new house for $80,000. He paid $20,000 down payment and agreed to pay the rest over the next 25 years in 25 equal beginning-of-year payments plus 9% compound interest on the unpaid balance. How much will these equal payments be?

10. These are shares that represent the ownership in a corporation and with voting rights.

Answer rating: 100% (QA)

1 Expected rate of return To find the expected rate of return we can use the formula Expected rate of return Coupon rate Current yield Current yield C... View the full answer