Question: Please answer all 4 parts to the question and round to 2 decimal places to each for a thumbs up! 1.a) What is the price
Please answer all 4 parts to the question and round to 2 decimal places to each for a thumbs up!
1.a) What is the price of a bond with a coupon rate of 8%, payable annually, a face value of $1000, 13 years to maturity, and a yield to maturity of 7.3%? (Round to 2 decimal places)
b) Consider a stock that is expected to pay a dividend of $1.98 one year from now. The dividend is expected to grow at a constant rate of 3.6% per year forever. Firms in the same industry provide an expected rate of return of 8.6%. What is the current price of the stock? (Round to 2 decimal places)
c) Consider a firm that has a debt-equity ratio of 1/4. The rate of return for debt is 5% and the rate of return for equity is 11%. The corporate tax rate is 35%. What is the weighted average cost of capital? (round to 2 decimal places)
d) A company has issued preferred stock with an annual dividend of $1.97 that will be paid in perpetuity. The current price of the stock is $27. What is the expected rate of return on the preferred stock? (round to 2 decimal places)
Thanks in advance, please round to 2 decimal places for each answer!
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