What do you expect the future price to be in five years

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Reference no: EM131919851

1. A 12-year bond with a face value of 1000 dollars is redeemable at par and pays quarterly coupons at 7.9 percent convertible quarterly. If the yield rate is 9 percent convertible quarterly, find the book value immediately after the payment of the 7th coupon.

2. Consider a firm that has just paid a dividend of $2.25. An analyst expects dividends to grow at a rate of 8.375% per year for the next five years. After that dividends are expected to grow at a normal rate of 5.15% per year. Assume that the appropriate discount rate is 7.375%. What do you expect the future price to be in five years?

Reference no: EM131919851

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