The present value of a dollar to be received one year from today is 0.91743. The present value of a dollar to be received two years from today is 0.82645. What is the price of a bond that pays an annual coupon of 8 percent and matures in two years? Find its yield to maturity.
Answer to relevant QuestionsYou are a financial advisor and one of your clients comes to you with a convertible bond that has a coupon rate of 8 percent. The market interest rate is 6 percent. The share price of the company that issued the bond is ...You bought a bond last year for $102.50 and just sold it for $98.50. What has happened to the interest rate over that period?FinCorp Inc. purchased a stock for $50. It expects to receive a dividend of $5 in one year and to sell the stock immediately afterwards.a. If the sale price is $75, what is the expected one-year holding period return?b. If ...Parker Imports Ltd. is expected to pay a $2.00 dividend in one year. The required rate of return is 9 percent. The firm uses a dividend payout ratio of 25 percent. Calculate the leading P/E ratio in the following cases:a. ...TelTec Inc. stock is expected to sell for $10 per share four years from now. TelTec has just paid a dividend of 50 cents per share. Dividends are expected to grow at a rate of 5 percent per year for the next four years. ...
Post your question