11. Manacle Pricing. A 30-year-manliness manacle delay visage estimate of $1,000 makes semiannual coupon liquidations and has a coupon rebuke of 8%. What is the manacle’s furnish to manliness if the manacle is vending for: (LO6-2)a. $900?b. $1,000?c. $1,100?
12. Bond Pricing. The aftercited table shows some basis for three zero-coupon manacles. The visage estimate of each manacle is $1,000. (LO6-2)
Bond Price Maturity (years) Yield to Maturity
A $300 30 —
B 300 — 8%
C — 10 10
a. What is the furnish to manliness of manacle A? (Express your retort as a percentage rather than a decimal.)
b. What is the manliness of B?
c. What is the cost of C?
13. Pricing Consol Bonds. Perpetual Life Corp. has issued consol manacles delay coupon liquidations of $60. (Consols pay curiosity-behalf forever and never developed. They are perpetuities.) (LO6-2)
a. If the required rebuke of retaliate on these manacles at the age they were issued was 6%, at what cost were they sold to the notorious?
b. If the required retaliate today is 10%, at what cost do the consols vend?
1. Stock Markets. True or erroneous? (LO7-1)
a. The bid cost is frequently superior than the ask cost.
b. An investor who wants to vend his supply without-delay should invade a season command.
c. The sale of distributes by a comprehensive investor is usually termed a “primary offering.”
d. Electronic Communications Network refers to the automated ticker tape on the New York Supply Exchange.
2. Stock Quotes. Go to finance.yahoo.com and get trading quotes for IBM.(LO7-1)
a. What are the final supply cost and negotiate cap?
b. What is the bid-ask circulate?
c. What are IBM’s dividend liquidation and dividend furnish?
d. What is IBM’s P/E affinity?
3. Stock Quotes. Here is a trivial dissect of the command body for Mesquite Foods:(LO7-1)Bid AskPrice Size Cost Size103 100 103.5 200102.5 200 103.8 200101 400 104 300 99.8 300 104.5 400
a. Georgina Sloberg submits a negotiate command to vend 100 distributes. What cost achieve she hold?
b. Norman Pilbarra submits a negotiate command to buy 400 distributes. What is the consummation cost that he achieve pay?
c. Carlos Ramirez submits a season bid command at 105. Achieve it enact without-delay?
4. P/E Ratios. Favorita Candy’s supply is expected to deserve $2.40 per distribute this year. Its P/E affinity is 18. What is the supply cost? (LO7-1)
5. Dividend Yield. BMM Industries pays a dividend of $2 per region. The dividend furnish on its supply is reputed at 4.8%. What is the supply cost? (LO7-1)
14.Constant-Growth Model. Arts and Crafts Inc. achieve pay a dividend of $5 per distribute in 1 year. It vends at $50 a distribute, and firms in the similar activity arrange an expected rebuke of retaliate of 14%. What must be the expected augmentation rebuke of the company’s dividends? (LO7-2 )
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