Stock has expected growth rate

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1. A bond pays a 10.2% coupon, semiannually, and has a $1000 par value. Its maturity is 5 years. If your required rate of return is 8%, how much would you be willing to pay for the bond?

2. A stock currently pays a $2.50 dividend. This dividend is expected to grow at a 4% rate into the foreseeable future. If your required rate of return is 12%, how much would you be willing to pay for the stock?

3. A stock has an expected growth rate of 0%, and pays a dividend of $2.75. The current market price is $45. What is the yield for the stock?

Reference no: EM131889811

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