Determine the price of the bonds with remaining to maturity

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1. A stock has an expected return of 13 percent, the risk-free rate is 7 percent, and the market risk premium is 8 percent. What must the beta of this stock be? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

2. Twenty-five-year B-rated bonds of Parker Optical Company were initially issued at a 12 percent yield. After 10 years, the bonds have been upgraded to Aa2. Such bonds are currently yielding 16 percent to maturity. Use Table 16-2.

Determine the price of the bonds with 15 years remaining to maturity.

Reference no: EM131924455

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