| | Introduction to Finance FIN2030 |
| | Week 3, Assignment 2 |
| | Part One: Quantative Exercises |
| | Stocks | Answers |
| | 1. Stock. What is the value of a stock with a |
| | a. $2.50 dividend just paid and an 8% required return with 0% growth? |
| | b. $3 dividend just paid and a 8% required return with 2% growth? |
| | c. $7 dividend to be paid and a 10% required return with 2% growth? |
| | 2. Stock. What is the required rate of return on a stock with a |
| | a. $2.50 expected dividend and a $19 price with 6% growth? |
| | b. $2.75 expected dividend and a $20 price with 8% growth? |
| | c. $2.50 expected dividend and a $19 price with 9% growth? |
| | 3. Stock. What is the growth rate of the stock with a |
| | a. $3.00 expected dividend and a $20.60 price with 15% required return? |
| | b. $2.40 expected dividend and a $25.35 price with 10% required return? |
| | c. $2 expected dividend and a $8.30 price with 11% required return? |
| | Bonds |
| | 1. Bond. What is the value of a $1,000 par value bond with annual payments of an |
| | a. 10% coupon with a maturity of 10 years and a 15% required return? |
| | b. 8% coupon with a maturity of 10 years and a 8% required return? |
| | c. 11% semiannual coupon with a maturity of 20 years and a 11% required return? |
| | d. 8% semiannual coupon with a maturity of 20 years and a 9% required return? |
| | 2. Bond. What is the yield to maturity of a $1000 par value bond with an |
| | a. 10% annual coupon and 10 years to maturity and a $1,000 price? |
| | b. 9.5% annual coupon and 20 years to maturity and a $788 price? |
| | c. 5.0% annual coupon and 8 years to maturity and a $800 price? |
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fin2030_w3_a2_template.xlsx
