Reference no: EM13748544
Part A: Moore Company is about to issue a bond with semiannual coupon payments, a coupon rate of 8%, and par value of $1,000. The yield-to-maturity for this bond is 10%.
a. What is the price of the bond if the bond matures in 5, 10, 15, or 20 years?
b. What do you notice about the price of the bond in relationship to the maturity of the bond?
Part B: The Crescent Corporation just paid a dividend of $2 per share and is expected to continue paying the same amount each year for the next 4 years. If you have a required rate of return of 13%, plan to hold the stock for 4 years, and are confident that it will sell for $30 at the end of 4 years, how much should you offer to buy it at today?
Part C: Use the information in the following table to answer the questions below.
|
State of Economy
|
Probability of State
|
Return on A in State
|
Return on B in State
|
Return on C in State
|
|
Boom
|
.35
|
0.040
|
0.210
|
0.300
|
|
Normal
|
.50
|
0.040
|
0.080
|
0.200
|
|
Recession
|
.15
|
0.040
|
-0.010
|
-0.260
|
a. What is the expected return of each asset?
b. What is the variance of each asset?
c. What is the standard deviation of each asset?
|
Describe and assess the stucture and performance
: Describe and assess the stucture and performance of the Pineapple Industies in Ghana, Changing market structure and perfrmance of the firms in the industry over the years.
|
|
Do the numbers mean anything to you case
: On the trip back to Accra, you realize the first thing to do is to compare the liquidity, leverage, activity, profitability and market ratios of the two companies. Using the statements of comprehensive income and financial position shown below, prepa..
|
|
Structural effect of increasing the police budget
: What assumptions must hold for OLS to give an unbiased estimate of β1, the structural effect of increasing the police budget on the murder rate?
|
|
What is the difference between a heretic and a martyr
: What is the difference between a heretic and a martyr? In your opinion, which group, the Catholics or the Protestants, was more radical in its efforts to stamp out heresy?
|
|
Bond in relationship to the maturity of the bond
: What do you notice about the price of the bond in relationship to the maturity of the bond?
|
|
Demonstrate arbitrage problems in international finance
: Describe forward, futures and options foreign currency markets, and discuss how they demonstrate arbitrage problems in international finance.
|
|
What was unique about the flamingo hotel casino
: What was unique about the Flamingo Hotel Casino? What key contributions did Howard Hughes make to the growth of Las Vegas?
|
|
Firms use to avoid hostile takeovers
: Question 2: Tactics that firms use to avoid hostile takeovers include:
|
|
Describe the treatment of women at the humanist schools
: Describe the treatment of women at the humanist schools.
|