Exam 5: Share Valuation and Bond Valuation

A five-year zero coupon bond with a face value of $1,000 is currently selling for $826.50. Assume that coupon payments are normally semi-annual. What is the bond's YTM?

A twenty-year zero coupon bond with a face value of $1,000 is currently selling for $326.50. Assume that coupon payments are normally semi-annual. What is the bond's YTM?

A ten-year bond has a par value of $1,000; a 7.5 percent coupon rate; and a yield to maturity of 8.25 percent. Assuming the coupons are paid semi-annually, the market price is closest to:

Matt's Carpentry Services Inc. has just paid a dividend of $0.55 per share. The dividends are expected to grow at an annual rate of 5 percent indefinitely. What is today's stock price if the required return is 12.5 percent?

The preference share of Gainsite Ltd is selling currently at $110.35. If your required rate of return is 9.75 percent, what is the dividend paid by this share?

A zero coupon bond with a face value of $1,000 is currently selling for $687.38. The bond has a market yield of 5.48 percent. What is the bond's term to maturity, assuming semi-annual compounding?

What is the YTM of a four-year bond with a par value of $1,000 and a 4 percent coupon rate when coupons are paid annually and the bond is priced at $1,000?

A five-year bond is currently selling for $930.11. It has a face value of $1,000 and a market yield of 8 percent. Coupons are paid semi-annually. The coupon rate is closest to: