1) What is the value of a bond that has a par value of $1,000, a coupon of $120 (annually), and matures in 10 years? Assume a required rate of return of 7.02%.
a) $1,200.78
b) $1,349.45
c) $1,198.45
d) $1,284.38
2) Lakes industries preferred stock has par value of $100 and pays dividends of $6 er share. it presently sells for $87 per share. What do investors require s a rate of return on this stock? Round off to the nearest .10%
a. 6.9%
b. 6%
c.14.5 %
d. 9.3%