What will be the percent change in the market price

Reference no: EM132788137

Problem 1: Cod Oil Inc. plans to pay an annual dividend of $2.50 per share indefinitely. If you require a 12.5 percent rate of return, how much is this stock worth to you?

A. $11.29

B. $6.67

C. $8.25

D. $20

E. $15

F. $0.34

Problem 2: Shady Rack Inc. has a bond outstanding with 10 percent coupon, paid semiannually, and 15 years to maturity. The market price of the bond is $1,039.55. Calculate the bond's yield to maturity (YTM). Now, if due to changes in market conditions, the market required YTM suddenly increases by 2% from your calculated YTM, what will be the percent change in the market price of the bond?

A. -14.01%

B. -17.76%

C. -16.39%

D. -15.66%

E. -14.87%

F. -17.09%

Reference no: EM132788137

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