1. NewCompany's bonds have 20 years remaining to maturity. Interest is paid annually; they have a $10,000 par value; the coupon interest rate is 5%; and the yield to maturity is 8%. What is the bond's current market price?
2. A bond has a $3,000 par value, 20 years to maturity, a 7.5% annual coupon, and sells for $2,500. What is its yield to maturity (YTM)?
3. A bond has a $3,000 par value, 20 years to maturity, a 7.5% annual coupon, and sells for $2,500. Assume that the yield to maturity remains constant for the next five years. What will the price be 5 years from today?
4. NewCompany's outstanding bonds have a $50,000 par value, a 6.25% semiannual coupon, 15 years to maturity, and a 6% YTM. What is the bond's price?
5. NewCompany is expected to pay a $1.25 per share dividend at the end of the year (i.e., D1 = $1.25). The dividend is expected to grow at a constant rate of 5.5% a year. The required rate of return on the stock, rs, is 12%. What is the stock's current value per share?