1.Mr. Bond is considering purchasing a bond with 10-year maturity and $1,000 face value.

The coupon interest rate is 8% and the interest is paid annually. If Mr. Bond requires 12%

yield to maturity on the investment, then, what is price of the bond ?

2.Mr. Bond II has just purchased a 5year, $1,000 par value bond. The coupon rate on this bond is 12%,

and the interest is paid annually. If you expect to earn a 10 percent yield to maturity on this bond, how much did he pay for it?

3. 10-year, 12% coupon bond that pays interest annually is currently selling for $1,083.

What is the yield to maturity of the bond?[The face value of the bond is $1,000]

4.A 3-year bond with 10% coupon rate and $1000 face value has yield to maturity of 8%

(APR).Assuming annual interest payments, calculate the price of the bond.

5.A four-year bond has an 8% coupon rate and a face value of $1000.If the current price of the bond is $870.51,

calculate the yield to maturity of the bond (assume annual interest payments).

Also, indicate whether the bond is a discount bond or a premium bond or a par bond.

6.Company X is expected to pay an year-end dividend of $5 a share on its common stock.

After the dividend payment the stock is expected to sell at $110 per share. The required

rate of return on the common stock is 15%. Then, calculate the current price of the stock.

7.A share of common stock has an expected long-run constant dividend growthrate of 7%,

and the most recent dividendD₀, was $5.00. The required rate of return on the common stock

is 18%.Then, using the dividend growth model, calculate the current price of the stock.

8.A share of common stock has an expected long-run constant dividend growthrate of 6%,

and the most recent dividendD₀, was $5.00. The stock is currently selling for $50 per share.

Calculate the required rate of return on the stock. Also calculate the dividend yield andcapital gains

yieldfor the stock

9.If the dividends on a preferred stock is $9 per year, and the required rate of return on the stock is

12%, then calculate the current price of the preferred stock .

10.For Stock A, the cash dividend expected one year from now is $9 [D₁].The dividends are expected

to grow at a constant rate of 6% per year for ever. The required rate of return on the common

stock is 15%. Then calculate the current price of the stock usingthe dividend growth model.