A perpetual bond has a P10,000 face value and provides an 10% annual coupon. The appropriate discount
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2. A coupon bond has a P10,000 face value and provides an 10% annual interest for 30 years. The appropriate discount rate is 12%. What is the value of the bond?
3. A bond has a P10,000 face value and provides an zero interest for 30 years. The appropriate discount rate is 12%. What is the value of the bond?
4. A common stock has no growth rate. Each share of stock just received an annual dividend of P2.00. The appropriate discount rate is 10%. What is the value of the common stock?
5. A common stock has an expected dividend growth rate of 10%. Each share of stock will receive an annual P3.24 dividend. The appropriate discount rate is 15%. What is the value of the common stock?
6. A 20-year bond has a coupon rate of 8 percent, and another bond of the same maturity has a coupon rate of 15 percent. If the bonds are alike in all other respects, which will have the greater relative market price decline if interest rates increase sharply? Why?
Related Book For
Accounting What the Numbers Mean
ISBN: 978-1260565492
12th edition
Authors: David Marshall, Wayne McManus, Daniel Viele
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