Valuation – zero-coupon bond

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A U.S. Government bond with a face amount of $10,000 with 13 years to maturity is yielding 5.5%. What is the current selling price?

 

Charlie Company is expected to grow at an annual rate of 6% indefinitely. The return on similar stocks is currently 11%. Charlie's board of directors declared a dividend of $1.85 yesterday. What should a share of Charlie Company sell for?

 

A $1000 par value convertible bond has a conversion price of $50. It is currently selling for $1,120 despite the fact that the bond’s coupon rate and the market rate are equal. The common stock obtained upon conversion is selling for $54 per share. What is the convertible bond’s conversion premium?

 

 

Valuation - preferred stock 
What is the value of a share of preferred stock that pays a $9.50 dividend, assume k is 12%.

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