Description of bonds and stocks

Reference no: EM1338694

Problem 1

A 3 year bond with a 10% coupon rate and $1000 face value yields 8% APR. Assuming annual compouding payment, calculate the price of the bond.

Problem 2

A four-year bond has an 8% coupon rate and a face value of $1000. If the current price of the bond is $878.51, calculate the yield to maturity of the bond( Assuming annual interest payments).

Problem 3

The NetTech Co. has just paid a dividend of $1 per share. the dividends are expected to grow at 20% per year for the next three years and at the rate of 5% per year thereafter. If the required rate of return on the stock is 15%(APR), what is the current value of the stock?

Reference no: EM1338694

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