“1) A $1000 par value bond was issued 25 years ago at a 12% coupon rate. It
currently has

10 years to maturity. Interest is paid annually. What would the price of
the bond

be today if interest rates were currently 8%? 14%?
2) ABC Company’s most recent stock dividend is
$3.00. The firm’s management feels

that dividends will remain level for the foreseeable future. If the
required rate of

return is 15% , what is the value of the stock? what would the value be
at 20%

required rate of return?
3)
XYZ paid a dividend of $2.00 per share last year. The company expects
earnings &

dividends to grow at a rate of 10% per year. What required rate of
return would result

in a stock price of $50 this year?
4)
A firms’ has paid the following dividends:
Year Dividend
2001 5.10
2000 4.76
1999 4.47
1998 4.22
1997 4.00

The firm expects the dividend
growth rate to be consistent with prior years’s growth.

If you require a return of 15% , what is the most you would pay per
share in 2002.
5)
A $1,000 bond was issued in the year 2000 at a rate of 7%. The bond’s
maturity was 20 years.

What is the most you would pay for the bond in 2012 if bonds of similar
risk were yielding a return of 5%?

6)
ABC pays a dividend of $3.00 per share. The Dividend is expected to grow
at a rate of 8%.

If you plan to purchase the stock next year, what required rate of
return would result in a stock

price of $25?1)
A $1000 par value bond was issued 25 years ago at a 12% coupon rate. It
currently has
10 years to maturity. Interest is paid annually. What would the price of
the bond
be today if interest rates were currently 8%? 14%? 2) ABC Company’s most recent stock dividend is
$3.00. The firm’s management feels
that dividends will remain level for the foreseeable future. If the
required rate of
return is 15% , what is the value of the stock? what would the value be
at 20%
required rate of return? 3)
XYZ paid a dividend of $2.00 per share last year. The company expects
earnings &
dividends to grow at a rate of 10% per year. What required rate of
return would result
in a stock price of $50 this year? 4)
A firms’ has paid the following dividends: Year Dividend 2001 5.10 2000 4.76 1999 4.47 1998 4.22 1997 4.00
The firm expects the dividend
growth rate to be consistent with prior years’s growth.
If you require a return of 15% , what is the most you would pay per
share in 2002. 5)
A $1,000 bond was issued in the year 2000 at a rate of 7%. The bond’s
maturity was 20 years.
What is the most you would pay for the bond in 2012 if bonds of similar
risk were yielding a return of 5%? 6)
ABC pays a dividend of $3.00 per share. The Dividend is expected to grow
at a rate of 8%.
If you plan to purchase the stock next year, what required rate of
return would result in a stock
price of $25?”