What is the percentage change in the price of this bond

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Q1. Casco common stock sells for $58.49 a share and pays an annual dividend that increases by 1.3 percent annually. The market rate of return on this stock is 12.6 percent. What is the amount of the last dividend paid?

Q2. Firestone Tires recently paid an annual dividend of $2.00 on its common stock. This dividend increases at an average rate of 3.8 percent per year. The stock is currently selling for $24.00 a share. What is the market rate of return?

Q3. Nordstrom is going to pay an annual dividend of $2.05 a share next year. This year, the company paid a dividend of $2 a share. The company adheres to a constant rate of growth dividend policy. What will one share of this common stock be worth three years from now if the applicable discount rate is 10 percent?

Q4. A newly issued 10-year, $1,000, zero coupon bond just sold for $211.05. What is the implicit interest, in dollars, for the first year of the bond's life? Assume semiannual compounding.

Q5. A 13-year, 6 percent coupon bond pays interest semiannually. The bond has a face value of $1,000. What is the percentage change in the price of this bond if the market yield to maturity rises to 6.7 percent from the current rate of 5.5 percent?

Reference no: EM132908169

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