Project #11150 - Financial Management

Each question must be APA format 250 word minimum.

 

 

Question 1  

Valuation – zero-coupon bond

A U.S. Government bond with a face amount of $10,000 with 8 years to maturity is yielding 3.5%. What is the current selling price?

 

Question 2

  Valuation – corporate bond

A $1,000 corporate bond with 10 years to maturity pays a coupon of 8% (semi-annual) and the market required rate of return is a) 7.2% and b) 10%. What is the current selling price for a) and b)?

 

Question 3

Valuation - preferred stock

What is the value of a share of preferred stock that pays a $4.50 dividend, assume k is 10%.

 

Question 4

  Valuation - preferred stock

What is the value of a share of preferred stock that pays a $9.50 dividend, assume k is 12%.

 

Question 5

Charlie Company is expected to grow at an annual rate of 6% indefinitely. The return on similar stocks is currently 11%. Charlie's board of directors declared a dividend of $1.85 yesterday. What should a share of Charlie Company sell for?

 

All work must be referenced to this textbook:

Lasher, W. R. (2011).  Practical financial management. Mason, OH. South-Western Cengage          Learning.

Subject Business
Due By (Pacific Time) 08/25/2013 04:00 pm
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