What is the yield to maturity of the DSI bond

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Question 1: Lowell Corporation has a dividend payout ratio of 90% and an internal growth rate of 3%. If its debt-equity ratio is 60%, what is its ROE?

Question 2: Database Software Inc. (DSI) and US Data Inc. (USD) have outstanding bonds that have 10 years to maturity and a coupon rate of 5%. They are in the same risk class. The only difference in these bonds is that DSI bond has a quarterly coupon payment, while USD bond has a semiannual coupon payment. The market price of the DSI bond is $1,082.09.

What is the yield to maturity of the DSI bond?

Question 3: You have a security that just paid you $100. It will pay you at every end of coming years. The amount of cash flow will decline 3% from the previous payment every year. If the required rate of return on this security is 8%, how much is the security worth of?

Reference no: EM132592280

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