Fin
301 Part 3 Problems
51. Determine the price of a
$1,000 par bond that has a ten-year maturity and 10% coupon while the market
rate of interest is 6%.
52. Determine the value of a
share of preferred stock that has a $2 dividend while the market rate interest
is 12%.
53. Determine the value of a
share of common stock that has a $1 dividend, 4% growth rate, and a required
rate of return of 13%.
54. An IBM bond pays 7% interest,
and a Florida State bonds pays 5%. If you are in a 40% tax bracket, which
should you purchase? (Assume that the level, of risk is the same for both
bonds.)
TUTORIAL PREVIEW
Price = Interest x
PVIFA 6%, 10 years + Maturity value x PVIF 6%, 10 years
File name: Fin 301 Part 3 problems.docx File type: .doc x PRICE:$10
