1 a 625 percent coupon bond with 25 years left to maturity, Ask an Expert

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1. A 6.25 percent coupon bond with 25 years left to maturity can be called in nine years. The call premium is one year of coupon payments. It is offered for sale at $1,125.75. What is the yield to call of the bond? (Assume interest payments are semiannual.)

2. A firm does not pay a dividend. It is expected to pay its first dividend of $0.39 per share in two years. This dividend will grow at 9 percent indefinitely. Use a 10.5 percent discount rate.

Compute the value of this stock.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92699764

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