1 what will an investor pay for a zero-coupon bond that has, Ask an Expert

Economics

1. What will an investor pay for a zero-coupon bond that has a $2,000 face value, a 25-year maturity, and a 7% yield to maturity?

a. $368.50

b. $257.98

c. $316.29

d. $452.10

2. When presented with an investment opportunity, Jospeh knows that calculating the interest rate associated with that investment is really important. Currently, he is evaluatiing a stock that will pay its next dividend in the amount of $6.50, and has a constant dividend growth rate of 5%. He can buy this stock for $65 per share.

What is the discount rate associated with this stock?

a. 10%

b. 18%

c. 15%

d. 12%

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Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M92311651

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