Question: I need help with these homework questions. Please complete each question and show all calculations/formulas. 1.Company X just issued 200,000 shares of preferred stock at

I need help with these homework questions.

Please complete each question and show all calculations/formulas.

1.Company X just issued 200,000 shares of preferred stock at a price of $25 per share.The company has promised to pay a quarterly dividend, with the first dividend of $0.25 occurring 3 months from now.These dividends are expected to grow at a constant rate each year.Given that the interest rate is 10%, what is the growth rate on this preferred stock?

2.Mr. Sweeney has a 12 year old nephew, Todd, who is trying o save up for a $300 bike.Mr. Sweeney wishes to help Todd, but he also wants to teach him a lesson in hard work and the value of money.Mr.Sweeney and Todd strike the following bargain: each week Todd will mow the lawn for Mr. Sweeney, and in return, Mr. Sweeney will deposit $25 in Todd's savings account, which pays an effective annual interest rate of 7%.How many months will it take Todd to save up enough money to buy the bike?

3.You just borrowed $1000 from Mr. Loan Shark.Mr. Shark requires you to pay $150 per week for the next 10 weeks.What is the effective interest rate on this loan?

4.Two years ago, XYZ Ltd. Issued a 10-year, 9% coupon bond with a face value of $1000.The bond makes quarterly coupon payments.Today, the bond yields an APR of 10% compounded semi-annually.What is the price of this bond today?

5.Which of the following statement are true?

I.Value of perpetual bond = coupon rate/r, which does not depend on the time period t, but does depend on the interest rate r

II.Bond prices are inversely related to the yields to maturity, not the coupon rates.Coupon rates are only used to calculate the coupon payments.

III.The value of the bond with the lower coupon will depend more on the future payment of its fair value, which, because of the longer period until payment, is more sensitive to interest rate changes.

6.The HET Corp has just issued semi-annual coupon bonds with a maturity of seven years and fair value of $1000 each.The price received by corporation is $1151.33 per bond, which represents a yield to maturity of 8%.What is the coupon rate on these bonds?

7.What would you pay for a share of ABC Corp. stock today if the next dividend will be $2 per share, if your required return on equity investments is 12%, and if the stock is expected to be worth $110 one year from now?

8.The dividend on Simple Motors common stock will be $2 in one year, $3.50 in two years, and $5.00 in three years.You can sell the stock for $75 in three years.If you require a 10% return on your investment, how much would you be willing to pay for a share of this stock today?

9.A stock that pays a constant dividend of $2.50 forever currently sells for $20.What is the required rate of return?

10.The preferred stock of the Limbaugh Institute pays a constant annual dividend of $3 and sells for $20.You believe that stock will sell for $22 in one year.You must, therefore, believe that the requird return on the stock will be _______ percentage points ________ in one year.

11.Suppose Pale Hose Inc. has just paid a dividend of $1.40 per share.Sales and profits for pale Hose are expected to grow at a rate of 5% per year, with its dividend expected to grow by the same amount.If the required return is 10%, what is the value of a share of Pale Hose?

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