Reference no: EM133116987

1.) If the coupon rate for a bond is 5% and the yield to maturity (required rate of return) is 6%, the bond most likely trades at:

a.) a discount.

b.) par value.

c.) a premium.

2.) A $1,000 par value bond has a coupon rate of 6%, paid semiannually, and 7 years until it matures. If the bond's yield to maturity is 4%, the bond's value is closest to:

a.) $1,120.04

b.) $1,121.06

c.) $1,211.26

3.) An investor purchases a bond for $1,085. The bond has 9 years until it matures and has a coupon rate of 4.5%, paid semiannually. The investor's yield to maturity on this bond is closest to:

a.) 1.70%

b.) 3.05%

c.) 3.40%

4.) The long-term growth rate for the economy is 4% and the required rate of return for a stock is 10%. The growth rate used in the constant dividend growth model to value stocks should be:

a.) less than 4%.

b.) between 4% and 10%

c.) greater than 10%

5.) The appropriate required rate of return for a stock is 12%. The stock just paid a $4.00 dividend and the dividend is expected to grow at a constant 5%. Based on these inputs, the stock's value is:

Group of answer choices

$33.33

$57.14

$60.00.