What price should thandi sell stock

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Question 1. Thandi has two bond options available. Both bonds pay $100 annual interest plus $1000 at maturity. Bond A has a maturity of 10 years and Bond B has a maturity of 15 years. What is the present value of each of these bonds when the going rate of interest is

a) 6%, and b) 11%?

Question 2. If the dividend expected during the coming year, D1, for Thandi's common stock is $2.73, and if growth is at 6%, at what price should Thandi sell her stock? Assume Thandi's stock has a beta of 1.10, the market rate is at 14%, and the risk free rate is at 3%.

Question 3. Thandi also wants to sell preferred stock to her stockholders. Her dividend will be $2.95, and the required rate of return on the stock is 12%. At what price should Thandi sell her preferred stock?

Reference no: EM132497287

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