Calculate the bond current yield and yield to maturity

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Reference no: EM132004188

Following are the securities and projections for Mogul Corp:

Stock A: REQUIRED RATE OF RETURN = 5% Constant-growth - growth rate of 3% D0 = $3.00

Stock B: REQUIRED RATE OF RETURN = 7% D0 = $4.00, growth at 5% per year for 2 years, followed by 4% forever

Stock C: REQUIRED RATE OF RETURN = 9% D0 = $2.00, growth at 25% for next 4 years, followed by 5% forever

Mogul has a 3.5% Treasury bond, semi-annual interest, with 4 years left to maturity and a quoted price of $962.81.

1) Calculate the bond’s current yield and yield to maturity.

2) Calculate the value per share today for stock A.

3) Calculate the value per share 4 years from today for stock B.

4) Calculate the value per share today for stock C.

Reference no: EM132004188

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