1. Knight Transportation, Inc. issued bonds on January 1, 2000 with a face value of $1000 per bond. They are due on January 1, 2003. The coupon rate is 6.10% and the market rate is 5.80%. What is the market value of the bond and why? Use an Excel template and copy the answer to solution window.
2. Assume Chicago Corporation pays a $5.00 dividend and will have a sale price of $200 in one year. The current required rate of return is 20%. What is the current value of the share?