Interest rates must have gone up since the bond was issued

Assignment Help Financial Management

Reference no: EM132040448

1. If a bond is selling at a premium (i.e., at a price more than its face value), which of the following is true?

Interest rates must have gone up since the bond was issued.

The coupon rate is higher than the yield to maturity.

The bond must be a zero-coupon bond.

The coupon rate is lower than the yield to maturity.

The bond must have been issued by the U.S. Treasury.

2. Show calculations please

Charlatan Used Auto World, Inc. earned $78 million last year and paid out 30 percent of earnings in dividends.

a. By how much did the company’s retained earnings increase?

b. With 20 million shares outstanding and stock price of $52, what was the dividend yield? (Hint: First compute dividends per share.)

c. Based on the information given, what is the firm’s ‘Retention Ratio’?

3. Shares of Hot Donuts common stock are currently selling for $32.35. The last annual dividend paid was $1.10 per share and the market rate of return is 10.7 percent. At what rate is the dividend growing? Please do NOT use excel to answer this question.

Reference no: EM132040448

Questions Cloud

Develop applicable performance measures : Propose 3-5 specific outcomes for which your chosen public health institution should be held accountable.

Expected cash inflows-what is the project npv : Project L costs $35,000, its expected cash inflows are $9,000 per year for 9 years, and its WACC is 11%. What is the project's NPV?

What is the future value of ordinary annuity : What is future value of ordinary annuity at the end of 39 years if $450 is deposited each month into account earning 7.15% annual interest compounded monthly?

The company should keep or place the defender at marr : Determine whether the company should keep or a place the defender at a MARR of 10% per year.

Interest rates must have gone up since the bond was issued : Interest rates must have gone up since the bond was issued.

What is the true initial cost figure southern : What is the true initial cost figure Southern should use when evaluating its project?

What causes partisan behavior on the courts : What causes partisan behavior on the courts? what causes partisan behavior on the courts?

Wacc and optimal capital budget : WACC AND OPTIMAL CAPITAL BUDGET Adamson Corporation is considering four average-risk projects with the following costs and rates of return:

Pattern of cash inflows and synergistic benefits : Calah, Inc. will provide the following pattern of cash inflows and synergistic benefits for the next 15 years. There is no tax loss carryforward.

User Account

All Pages