Calculate the value of the stock

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Q1. Frozen Food Bhd has issued a bond with par value of RM1,000, a coupon rate of 9 percent that is paid semi-annually, and that matures in 10 years. If an investor requires a 12 percent yield, calculate the value of the bond. Briefly describe the relationship between the interest rate and bond value.

Q2. Iriz Bhd paid RM2.00 per share in common stock dividends last year. The company's policy is to allow its dividend to grow at 5 percent for 4 years and then the rate of growth changes to 3 percent per year from year five and on. Assume the required rate of return is 8 percent, calculate the value of the stock.

Reference no: EM132606199

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