What is the current price of the bond

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Reference no: EM132262561

1. Apple’s current dividend is $7.50. You expect the company to grow quickly because of the new bezelless phones they will produce. Specifically, you think the company will grow by 48% for 1 year, 36% for the next 2 years after that and then by 8% forever. Given a required rate of return of 18%, what is the price of that company’s stock today?

2. Tesla issued some bonds. After hearing how poorly Model 3 production is going, an investor is interested in selling the bond and seeing how much it would be work. The bond matures in 13 years, has a coupon rate of 6.5%, and has a face value of $1000. The bond pays semi-annual coupons. What is the current price of the bond if the current market interest rate on the bond is 15%? Use semi-annual compounding.

Reference no: EM132262561

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