Question 1: What is the yield-to-maturity of the following bond? WHY?
Price = 113
Discount Rate Present Value of Cash Flow of Bond
6% 120
8% 114
9% 112
10% 98
Question 2: What is the return on the following investment?
Income = $400
Price t=0 = $3000
Price t=1 = $4000
Question 3: Given the following information, calculate the Price of the stock.
g = 8%
r = 9%
d(1) = $4
Question 4: Given the following data, calculate the price earnings ratio for the stock,
g = 8%
r = 9%
Payout ratio of earnings = 40%