1. We have a 12%, 15 year bond, which sells for $900. If the firm has the right to call it back after 6 years at par plus half a year’s coupon. Compute the YTM and the YTC. Which will the investor attain?
2. The firm-level FCF of New Media Inc. is estimated to be $9.8 million in 2016E. In 2016 it is expected to have 2.1 million shares outstanding. Using a relative valuation approach and the information below, what is the estimated price of a share of New Media Inc Stock.
$175.10
$56.48
$60.20
$126.42