Calculate the bond coupon rate and coupon yield

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1. A Treasury bond is quoted at a price of 101:14 with a current yield of 7.236 percent. What is the coupon rate?

2. Argaiv Towers has outstanding an issue of preferred stock with a par value of $100. It pays an annual dividend equal to 5 percent of par value. If the required return on Argaiv preferred stock is 4 percent, and if Argaiv pays its next dividend in one year, what is the market price of the preferred stock today? Show your calculations.

3. A bond makes two $45 interest payments each year. Given that the bond’s par value is $1,000 and its price is $1,050, calculate the bond’s coupon rate and coupon yield.

Reference no: EM132005831

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