Suppose that you buy a 15-yeary 6 % coupon bond today when the yield to maturity (YTM) is 8%. One year from now, the yield on your bond has increased by 2%, and you decide to sell  what is the rate of return on bond investment. a common stock has just paid a dividend  of  $3. The dividend is expected to grow at 3% for 8 years, then it will grow at 1% perpetuity. 

What is the stock worth ?

Answer rating: 100% (QA)

SOLUTION The rate of return on bond i... View the full answer