What is the intrinsic value of the stock

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Reference no: EM132017205

1. High Flyer industries just paid its annual dividend of $3 per share. The dividend is expected to grow at 7% indefinitely. The beta is 1.3, Rfr is 5%. The market risk premium is 6.0%. What is the intrinsic value of the stock?

2. Coupon pays 4%. Semi-annual coupon payments. 70 days have passed since the past payment. Par is $1000. Flat price is $985. What is the Invoice Price? (HINT: Use a base of 182.5 days per half-year.)

3. 9% annual coupon. 15 year bond. Par is $1000. One year into the bond’s life (14 years to maturity), the market rates are cut down by 50 basis points. What is the updated value of the bond?

Reference no: EM132017205

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