Builtrite preferred stock has a 5 coupon based on a par

Question

1. Builtrite bonds have the following: 5 ½% coupon, 16 years until maturity, $1000 par and are currently selling at $1032. If you want to make an 5% return, what would you be willing to pay for the bond?

• $1028
• $1036
• $1042
• $1054

2. Builtrite sold 12 year, $1000 par value, zero coupon bonds yielding 4%. What did they sell for?

• $643
• $676
• $625
• $658

3. Builtrite preferred stock has a 5% coupon based on a par value of $60 a share. Currently, investors require a 4% return. What is the value of Builtrite's preferred stock?

• $60
• $66
• $75
• $90

4. Given the following information, calculate the current value of the stock: current dividend is $3.00, projected super normal growth for three years at 20%, growth rate after year 3 should remain constant at 9% and you want to earn a 16% annual return. What should you pay for the stock?

• $68.62
• $56.89
• $72.82
• $61.33