What is the bond yield to maturity

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1. We have a stock which has a P/E of 12. It has 1 million outstanding shares and the equity is $2 million. Its net profit margin, financial leverage and ATO are .07, 1.3 and 1.6 respectively. Derive the price for next year. What are 4 important variables that affect P/E ratios?

2. You just purchased a bond that matures in 5 years. The annual bond (not semiannual) has a face value of $1,000 and has a 9% coupon. The bond has a current yield (annual coupon payment divided by the market price) of 8.21%. What is the bond's yield to maturity? Identify all numbers and show all work.

Reference no: EM131942847

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