Kingsway Electronics Inc. is expecting a period of intense growth and has decided to increase the annual
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Kingsway Electronics Inc. is expecting a period of intense growth and has decided to increase the annual dividend by 25% a year for the next three years. After that they will maintain a constant growth rate of 6% per year. Last year, the company paid $2.35 as the annual dividend per share. What is the current price of this stock if the required rate of return is 10%? (10 marks)
2. Pearl Inc. offers a 6.5% coupon bond with semi annual payments. The yield to maturity is 6.71% and the maturity date is 7 years from today. What is the market price of this bond if the face value is $1,000? Show the calculations in detail. (10 marks)
Related Book For
Intermediate Accounting
ISBN: 978-0071339476
Volume 1, 6th Edition
Authors: Beechy Thomas, Conrod Joan, Farrell Elizabeth, McLeod Dick I
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