BlackBean Ltd has issued bonds with 25 years to maturity and a face value of $1000. The semi-annual coupon payment will be 5% p.a. If the required rate of return is 7% p.a., what is the intrinsic value of the bond?

 

Two years ago you bought ordinary shares from Wild Acre Metals at a price of $16.00 and received a dividend of $1.50 a share last year. You expect the share to grow at 5% per year. If the appropriate rate of return on this share is 10%, how much are you willing to pay for the share today?

 

A share currently sells for $63 per share, and the required return on the share is 10%. Assuming a growth rate of 5%, calculate the share's last dividend paid.

 

An investor is contemplating the purchase of ordinary shares at the beginning of this year and to hold the shares for one year. The investor expects the year-end dividend to be $2.00 and expects a year-end price for the share of $40. 

Calculate the value of the share to this investor if the required rate of return is 12%.

Answer rating: 100% (QA)

1 Intrinsic Value of the Bond To calculate the intrinsic value of the bond we need to find the present value of the future cash flows coupon payments ... View the full answer