Important Instructions:

- Underline the keywords in your answer

- Separate each idea with a paragraph.

- Your answer should demonstrate your understanding of the various dimensions of the concept.

- The mark that you shall get will reflect my reading of the clarity and depth of your understanding.

-no simply copy-paste from the web.

- If I see the same answers as another student it's very clear that students are copying from each other and in such cases, the marks will definitely be less.

3. What are price-earnings (PE) ratios?

4. What is the meaning of the cost of equity? Who pays this cost of equity and to whom? How do you calculate the cost of equity?

Valuing Bonds

5. What is a bond? Who issues bonds and why? Who buys bonds and why?

6. What determines the value of a bond? Write down the formula for determining the price of the bond and explain it briefly.