Annual coupon bond with a face value

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Reference no: EM131178300

1) A five year 6% annual coupon bond with a face value of $1000 sells in the market for a YTM of 5%. What is the fair market price of this bond?

2) XYZ Corp just paid a $1.50 dividend per share yesterday. You expect dividends to grow at 3% per year forever. The expected return for this firm is 8.5%, what is the fair price of one share of XYZ stock?

Reference no: EM131178300

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Annual coupon bond with a face value : A five year 6% annual coupon bond with a face value of $1000 sells in the market for a YTM of 5%. What is the fair market price of this bond? XYZ Corp just paid a $1.50 dividend per share yesterday. You expect dividends to grow at 3% per year forever..

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