Calculate the yield to maturity-calculate the yield to call

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1. The market capitalization rate on the stock of Aberdeen Wholesale Company is 10%. Its expected ROE is 12%, and its expected EPS is $5. If the firm's payout ratio is 40%, what is the value of the stock assuming a constant growth of dividends?

2. Assume a 10 year bond, callable at par in 4 years, with a 5% coupon and a clean dollar call price of $115: Assume simi-annual compounding, if appliable.

a. Calculate the Yield to Maturity

b. Calculate the Yield to Call

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Reference no: EM131967623

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