1. Microhard has issued a bond with the following characteristics: Par: $1,000 Time to maturity: 12 years Coupon rate: 7 percent Semiannual payments Calculate the price of this bond if the YTM is (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.):
Price of the Bond
a. 7 percent $
b. 9 percent $
c. 5 percent
2. The next dividend payment by ECY, Inc., will be $2.08 per share. The dividends are anticipated to maintain a growth rate of 6 percent, forever. The stock currently sells for $42 per share.
What is the dividend yield?
What is the expected capital gains yield?