Part One: Quantative Exercises Stocks Answers 1. Stock. What is the value of a s
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Part One: Quantative Exercises Stocks Answers 1. Stock. What is the value of a stock with a a. $2.50 dividend just paid and an 8% required return with 0% growth? b. $3 dividend just paid and a 8% required return with 2% growth? c. $7 dividend to be paid and a 10% required return with 2% growth? 2. Stock. What is the required rate of return on a stock with a a. $2.50 expected dividend and a $19 price with 6% growth? b. $2.75 expected dividend and a $20 price with 8% growth? c. $2.50 expected dividend and a $19 price with 9% growth? 3. Stock. What is the growth rate of the stock with a a. $3.00 expected dividend and a $20.60 price with 15% required return? b. $2.40 expected dividend and a $25.35 price with 10% required return? c. $2 expected dividend and a $8.30 price with 11% required return? Bonds 1. Bond. What is the value of a $1,000 par value bond with annual payments of an a. 10% coupon with a maturity of 10 years and a 15% required return? b. 8% coupon with a maturity of 10 years and a 8% required return? c. 11% semiannual coupon with a maturity of 20 years and a 11% required return? d. 8% semiannual coupon with a maturity of 20 years and a 9% required return? 2. Bond. What is the yield to maturity of a $1000 par value bond with an a. 10% annual coupon and 10 years to maturity and a $1,000 price? b. 9.5% annual coupon and 20 years to maturity and a $788 price? c. 5.0% annual coupon and 8 years to maturity and a $800 price? Part One: Quantative Exercises Stocks Answers 1. Stock. What is the value of a stock with a a. $2.50 dividend just paid and an 8% required return with 0% growth? b. $3 dividend just paid and a 8% required return with 2% growth? c. $7 dividend to be paid and a 10% required return with 2% growth? 2. Stock. What is the required rate of return on a stock with a a. $2.50 expected dividend and a $19 price with 6% growth? b. $2.75 expected dividend and a $20 price with 8% growth? c. $2.50 expected dividend and a $19 price with 9% growth? 3. Stock. What is the growth rate of the stock with a a. $3.00 expected dividend and a $20.60 price with 15% required return? b. $2.40 expected dividend and a $25.35 price with 10% required return? c. $2 expected dividend and a $8.30 price with 11% required return? Bonds 1. Bond. What is the value of a $1,000 par value bond with annual payments of an a. 10% coupon with a maturity of 10 years and a 15% required return? b. 8% coupon with a maturity of 10 years and a 8% required return? c. 11% semiannual coupon with a maturity of 20 years and a 11% required return? d. 8% semiannual coupon with a maturity of 20 years and a 9% required return? 2. Bond. What is the yield to maturity of a $1000 par value bond with an a. 10% annual coupon and 10 years to maturity and a $1,000 price? b. 9.5% annual coupon and 20 years to maturity and a $788 price? c. 5.0% annual coupon and 8 years to maturity and a $800 price?Explanation / Answer
ANS. BOND VALUE
A) $36.06
B) $51.00
C)$ 89.25
STOCK RATE OF RETURN
A) 19.945%
B) 22.85%
C)23.342%
GROWTH RATE OF STOCK
A)0.44%
B)0.53%
C) - 13.1%
BONDS PRICE
A) $749.06
B)$1000
C)$1000
D)$907.99
YIELD OF Matuarity
a) YTM = 10%
anaual YTM = 10%
B)YTM = 12.4%
anaual YTM = 12.4%
C)YTM = 8.55%
anaual YTM = 8.55%