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Calculate the yield to maturity

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Calculate the yield to maturity on the following bonds:

a. A 9 percent coupon (paid semiannually) bond, with a $1,000 face value and 15 years remaining to maturity. The bond is selling at $985.

b. An 8 percent coupon (paid quarterly) bond, with a $1,000 face value and 10 years remaining to maturity. The bond is selling at $915.

c. An 11 percent coupon (paid annually) bond, with a $1,000 face value and 6 years remaining to maturity. The bond is selling at $1,065.

A stock you are evaluating just paid an annual dividend of $2.50. Dividends have grown at a constant rate of 1.5 percent over the last 15 years and you expect this to continue.

a. If the required rate of return on the stock is 12 percent, what is its fair present value?

b. If the required rate of return on the stock is 15 percent, what should the fair value be four years from today?

Reference no: EM132689498

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