What will be the approximate bond price after yield change

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Reference no: EM131980756

1. Over the next two years xyz corp. will pay dividend of 2 and 2.75 in years 1 and 2. There after dividends will grow at a rate of 2% per year. What is the current value of the firm´s stock assuming a required rate of return of 15%?

2. A 20-year bond has a price of $828.41, a yield of 10%, and duration of 9.386 years. If the bond’s yield increases by 50 basis points, what will be the approximate bond price after the yield change?

Reference no: EM131980756

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