How much is the present value of stock

Assignment Help Financial Management

Reference no: EM132014559

1) A $1,000 par value bond's annual coupon rate is 4 percent but it pays coupon twice a year. The yield to maturity is 6 percent p.a. and it has 10 years to maturity. If the yield to maturity remains unchanged, what is the price 8 years from now?

2) BBM Co. stock just paid $2.00 dividend per share. The market expects that the dividend will grow at 7% annually for the next 3 year and then 3% anually forever. Assuming a required return of 10%, how much is the present value of stock? (Round to 4 decimal places)

(Please show steps)

Reference no: EM132014559

Questions Cloud

Undertake is moving checkpoint to reduce staffing at plant : A project we are just beginning to undertake is moving a checkpoint to reduce staffing at a plant by 9 full time employees.

What is wing air weighted average cost of capital : Wing Air, Inc. has a target capital structure of 65% percent common stock. What is Wing Air's weighted average cost of capital?

Moving checkpoint to reduce staffing at plant : A project we are just beginning to undertake is moving a checkpoint to reduce staffing at a plant by 9 full time employees.

Warner cost of not taking the cash discount : What is Mr. Warner's cost of not taking the cash discount?

How much is the present value of stock : Assuming a required return of 10%, how much is the present value of stock?

Four risk categories used to compute risk-weighted assets : Suppose that the bank has a quarter of its assets in each of the four risk categories used to compute risk-weighted assets.

Bank asset grow over the next year for ratio not to fall : By what percentage can the bank’s asset grow over the next year for the ratio not to fall below this level?

What if rates suddenly fall by two percent instead : Bond J has a coupon rate of 6 percent and Bond K has a coupon rate of 12 percent. What if rates suddenly fall by 2 percent instead?

Discussion of the present value cost and benefits : Discussion of the present Value cost. Discussion of the present value benefits. Is the project feasible using NPV and B/C ration criteria?

User Account

All Pages