4 finance problems 5.1 5.5 6.3 6.4

4 finance problems 5.1 5.5 6.3 6.4 

5.1 Jackson Corporation's bonds have 12 years remaining to maturity. Interest is paid annually...? Jackson Corporation's bonds have 12 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 8%. The bonds have a yield to maturity of 9%. What is the market price of these bonds?

5.5 Treasury bond that matures in 10 years has a yield of 6%. A 10 year corporate bond has a yield of 9%. Assume that the liquidity premium on the corporate bond is 0.5%.

What is the default risk premium on the corporate bond?

6.3 Risk free rate is 5 and the market risk premium is 6 What is the expected return for the overall stock market What is the required rate of return on a stock that has a beta of 1.2?

6.4 A stock's returns have the following distribution: Demand for Probability of Rate of return Company's this Demand if this demand Products Occurring Occurs Weak 0.1 (50%) Below Average 0.2 (5) Average 0.4 16 Above average 0.2 25 Strong 0.1 60 Calculate the stock's expected return, standard deviation, and coefficient of variation.

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