What is the expected growth rate of dorpacs dividends

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Assignment

1. You are considering a car loan with a stated APR of 6% based on monthly compounding. What is the effective annual rate of this exchange?

2. Your company wants to raise $10 million by issuing 20-year zero-coupon bonds. If the yield to maturity on the bonds will be 6% (annually compounded APR), what total principal amount of bonds must you issue?

3. The yield to maturity of a $1000 bond with a 7% coupon rate, semiannual coupons, and two years to maturity is 7.6% APR, compounded semiannually. What must its price be?

4. Dorpac Corporation has a dividend yield of 1.5%. Its equity cost of capital is 8%, and its dividends are expected to grow at a constant rate.

1. What is the expected growth rate of Dorpac's dividends?
2. What is the expected growth rate of Dorpac's share price?

5. The following table contains prices and dividends for a stock. All prices are after the dividend has been paid. If you bought the stock on January 1 and sold it on December 31, what is your realized return?


Price

Dividend

Jan 1

10.00


Mar 31

11.00

0.20

Jun 30

10.50

0.20

Sep 30

11.10

0.20

Dec 31

11.00

0.20

Reference no: EM131815867

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