Discuss the construct of the time value of money

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1. XYZ Co has a dividend payout ratio of 25% (which means it has a retention ratio of 75%) If Return on Earnings is 6%, what is the expected growth rate for dividends?

2. Discuss the construct of the time value of money and how it relates to investing.

3. A bond with 14 years to maturity paying a 4% coupon is selling to yield 5.5%. Calculate the bond's duration when yields to maturity change by 50bp, the bond's convexity and the % change in the bond's price.

Reference no: EM131999453

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