FIN 571 NERD Education Specialist /fin571nerd.com FIN 571 NERD Education Specialist /fin571nerd.com | Page 46

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 ? 1000, 25 years to maturity, and a
coupon rate of 6.4 percent paid annually. If the yield to maturity is 7.5
percent, what is the current price of the bond? Q-4 (Set 1) 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? (Do not round intermediate calculations and enter
your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Dividend yield
% What is the expected capital gains yield? (Do
not round intermediate calculations and enter your answer as a
percent rounded to 2 decimal places, e.g., 32.16.) Capital gains yield
% Q-4 (Set 2) 4.Schiller Corporation will pay a
$3.14 per share dividend next year. The company pledges to increase
its dividend by 5 percent per year, indefinitely. If you require a return
of 12 percent on your investment, how much will you pay for the
company’s stock today? (Do not round intermediate calculations and
round your answer to 2 decimal places, e.g., 32.16.) 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? (Do not
round intermediate calculations and enter your answer as a percent
rounded to 2 decimal places, e.g., 32.16.) Required return
% 5.
(Set 2) The next dividend payment by ECY, Inc., will be $1.60 per
share. The dividends are anticipated to maintain a growth rate of 6
percent, forever. The stock currently sells for $30 per share. What is
the required return? (Do not round intermediate calculations and enter
your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Q-
6 (Set 1) Ayden, Inc., has an issue of preferred stock outstanding that
pays a dividend of $6.75 every year, in perpetuity. This issue
currently sells for $93 per share. What is the required return? (Do not
round intermediate calculations and enter your answer as a percent
rounded to 2 decimal places, e.g., 32.16.) Q-6 (Set 2) 6. The Starr Co.
just paid a dividend of $1.55 per share on its stock. The dividends are
expected to grow at a constant rate of 6 percent per year, indefinitely.
Investors require a return of 14 percent on the stock. What is the