Lisa Stills

Problem 8.12

Four years ago, Lisa Stills bought six-year, 15.44 percent coupon bonds issued by the Fairways Corp. for $947.68. If she sells these bonds at the current price of $857.51, what will be her realized yield on the bonds? Assume similar coupon-paying bonds make annual coupon payments. (Round answer to 2 decimal places, e.g. 15.25%.)
Realised rate of return
_____________%

Problem 8.16

Rockne, Inc., has outstanding bonds that will mature in six years and pay an 8 percent coupon semiannually. If you paid $1,089.09 today and your required rate of return was 5.60 percent.

What is the worth of the bond? (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25.)
Worth of the bond $______________________


Did you pay the right price for the bond? ___________________


Problem 8.22

Adrienne Dawson is planning to buy 10-year zero coupon bonds issued by the U.S. Treasury. If these bonds have a face value of $1,000 and are currently selling at $409.52, what is the expected return on them? Assume that interest compounds semiannually on similar coupon paying bonds. (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25%.)
Effective rate of return
________________%
Problem 9.6

Nynet, Inc., paid a dividend of $4.02 last year. The company's management does not expect to increase its dividend in the foreseeable future. If the required rate of return is 18.5 percent, what is the current value of the stock? (Round answer to 2 decimal places, e.g. 15.25.)
Current value $_________________

Problem 9.8

Ron Santana is interested in buying the stock of First National Bank. While the bank expects no growth in the near future, Ron is attracted by the dividend income. Last year the bank paid a dividend of $6.46. If Ron requires a return of 15.5 percent on such stocks, what is the maximum price he should be willing to pay for a share of the bank’s stock? (Round answer to 2 decimal places, e.g. 15.25.)
Maximum price $___________________

Problem 9.12

Reco Corp. is expected to pay a dividend of $2.49 next year. The forecast for the stock price a year from now is $39.50. If the required rate of return is 15.0 percent, what is the current stock price? Assume constant growth. (Round answer to 2 decimal places, e.g. 15.25.)
Current stock price $______________________

Problem 9.16

The preferred stock of Axim Corp. is currently selling at $47.29. If the required rate of return is 11.7 percent, what is the dividend paid by this stock? (Round answer to 2 decimal places, e.g. 15.25.)
Dividend paid $_____________________