FIN 571 TUTOR Motivated Minds/fin571tutor.com FIN 571 TUTOR Motivated Minds/fin571tutor.com | Page 60

Q-3 (Set 2)
A Japanese company has a bond outstanding that sells for 90 percent of its
¥100,000 par value. The bond has a coupon rate of 5.7 percent paid
annually and matures in 19 years.
What is the yield to maturity of this bond? (Do not round intermediate
calculations and enter your answer as a percent rounded to 2 decimal
places, e.g., 32.16.)
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.)