1. Suppose a 10 year, $1000 bond with a 11% coupon rate and semiannual coupons is trading for the price of 907.37 a) What is the bond yield to maturity (EXPREES as an APR with semiannual compounding) b) if the bond's ytm changes to 8% APR What will the bond price be?
2. Suppose a 5 year $1000 bond with the annual coupons has the price of $990 and yield to maturity is 6%. What is the bonds coupon rate?
3. Ankle cooperation has a current price of$ 28, is expected to pay a dividend of $2 in one year, and its expected price right after paying that dividend is $29
a) What is ankle's expected dividend yield?
b) What is ankle's expected capital gain?
c) What is ankle's equity cost of capital?
3. Summit System will pay a dividend of $1.57 one year from now. If you expect Summit's dividend to grow to 5.9% per year, what is the price per share if its equity cost of capital is 10.9%
4. Colgate-Palmolive Company has just paid an annual dividend of $.85 Analysts are predicting a (n) 11.2% per year growth rate in earnings over the next five years. After that, Colgate's earnings are expected to grow at the current industry average of 6.1%per year. If Colgate's equity cost of capital is 8.4%% per year and its dividend payout ratio remains constant, what price does the dividend discount model predict Colgate should sell for?