Reference no: EM132843761

Problem 1) You want to invest in a stock that pays $6.00 annual cash dividends for the next five years. At the end of the five years, you will sell the stock for $30.00. If you want to earn 10% on this investment, what is a fair price for this stock if you buy it today?

Problem 2) Pulford Corporation's next dividend and stock price are expected to be $4 and $20 respectively. If the investor's rate of return is 10%, determine the stock price now

Problem 3) Butterup's 'N More wants to offer some preferred stock that pays an annual dividend of $2.00 a share. The company has determined that stocks with similar characteristics provide a 9% rate of return. What price should Butterup's expect to receive per share for this stock offering?

Problem 4) Dhalia Corporation issued $100 million bonds that mature in 30 years and have a 5% coupon rate that is paid annually. If the bonds were sold to yield 3.4%, determine the price of the bonds at the end of year 25.

Problem 5) Rapid River, Inc., has a 7.5% coupon bond that matures in 9 years. The bond pays interest semi-annually. What is the market price of a $1,000 face value bond if the yield to maturity is 6.8%?