1 calculate the price of a 65 percent coupon bond with 10, Ask an Expert

Finance

1. Calculate the price of a 6.5 percent coupon bond with 10 years left to maturity and a market interest rate of 8.0 percent. (Assume interest payments are semiannual.) (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Bond price $

Is this a discount or premium bond?

Discount bond

Premium bond

2. Camper,Inc. is interested in acquiring Baxter Corp. Baxter has 40 million shares outstanding. Its WACC is 9.5% and the risk free rate is 5%. Baxter has $10 million in debt. Baxter's free cash flow is $25 million annually and is expected to grow at a constant rate of 4% per year. Calculate the intrinsic value of Baxter's stock, using the formula Vop = FCF0(1+g)/WACC - g. Based on your calculations, what is the value of Baxter's stock per share?

$11.11

$11.57

$11.82

$14.00

None of the above

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92679102

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