# solution

A stock just paid a dividend of \$7. If you expect future annual
dividends will grow at a constant 3.1% every year thereafter and the
stock’s required rate of return is 11.7%, what is a fair price for the
A 9-year maturity, 8% coupon bond has a par value of
\$1,000 and semi-annual coupon payments. You purchase the bond at face
value when it is issued. You hold the bond for 6 months, collect the
first coupon payment, and then sell the bond immediately. If the bond’s
yield-to-maturity is 5.4% when you sell it, what is your percentage
return over this 6-month holding period? Enter your answer as a decimal
and show 4 decimal places. For example, if your answer is 6.25%, enter
A bond currently sells for \$974. If it has a
yield-to-maturity of 5.3%, par value of \$1,000 and 17 years remaining
until maturity, what must be its coupon rate? Assume the bond pays
decimal form showing 4 decimal places. For example, if your answer is
8.52%, enter.0852.

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