What is the change in the bond price in percentage

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1. You want to invest to the rotten apple's stock which just paid the dividend of $2.00. The dividend is expected to grow at 4% constantly. The required rate of return is 10%. If the current market price of the rotten apple stock is $32 in the stock market, would you really invest to the rotten apple stock?

2. Morin Company's bonds mature in 8 years, have a par value $1,000 and make an annual coupon interest payment of $65 which will be made semi-annually. The market requires an interest rate of 8.2% on these bonds. What is the bond price? What would be the bond's price if you purchase Morin Company's bond next year? What is the change in the bond's price in percentage?

Reference no: EM132020183

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