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FIN 571 Week 4 Connect Problems
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FIN 571 Week 4 Connect Problems
1.Even though most corporate bonds in the United States make
coupon payments semiannually, bonds issued elsewhere often have
annual coupon payments. Suppose a German company issues a bond
with a par value of €1,000, 20 years to maturity, and a coupon rate of
7 percent paid annually.If the yield to maturity is 8.1 percent, what is
the current price of the bond?
2.Microhard has issued a bond with the following
characteristics: Calculate the price of this bond if the YTM is :
3.Yan Yan Corp. has a $2,000 par value bond outstanding with a
coupon rate of 5.5 percent paid semiannually and 16 years to
maturity. The yield to maturity of the bond is 5.8 percent. What is the
dollar price of the bond?
4.The next dividend payment by ECY, Inc., will be $1.96 per share.
The dividends are anticipated to maintain a growth rate of 4 percent,
forever. The stock currently sells for $39 per share. What is the
dividend yield? What is the expected capital gains yield?
5.Siblings, Inc., is expected to maintain a constant 3.6 percent growth
rate in its dividends, indefinitely. The company has a dividend yield
of 5.4 percent. What is the required return on the company's stock?