What is the ytm of the bond

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Norma has one share of stock and one bond. The total value of the two securities is 1,400.98 dollars. The stock pays annual dividends. The next dividend is expected to be 4.56 dollars and paid in one year. In two years, the dividend is expected to be 8.74 dollars and the stock is expected to be priced at 121.68 dollars. The stock has an expected return of 15.08 percent per year. The bond has a coupon rate of 10.68 percent and a face value of 1,000 dollars; pays semi-annual coupons with the next coupon expected in 6 months; and matures in 15 years. What is the YTM of the bond? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.

Reference no: EM131990634

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