1. If a semiannual bond with a face value of $1,000 has an 8 % annual coupon rate and a 10-year maturity. The current price of the bond is approximate $933.55. What’s the annual yield-to-maturity on this bond?
2. Todd Co. just paid dividends of $2.00 (D0) per share. These dividends are expected to grow at an 18% rate for the next three years and at a 6% rate thereafter (forever). What is the value of the stock if the appropriate discount rate is 12%?
3. Box Co. is selling an IPO of stock. They expect to pay the new shares equivalent of $9 dividend per share and expect the stock to be priced at $120 in four years. The market required rate of return is estimated to be 18 per cent. What is value of the stock today?