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Problem 8.2 Pierre Dupont just received a cash gift from his grandfather. He plans to invest in a… 1 answer below » Problem 8.2 Pierre Dupont just received a cash gift from his grandfather. He plans to invest in a fiveyear bond issued by Venice Corp. that pays an annual coupon of 5.83 percent. If the current market rate is 7.68 percent, what is the maximum amount Pierre should be willing to pay for this bond? (Round answer to 2 decimal places, e.g. 15.25.) Pierre should pay $ Problem 8.3 Knight, Inc., has issued a threeyear bond that pays a coupon of 6.80 percent. Coupon payments are made semiannually. Given the market rate of interest of 5.10 percent, what is the market value of the bond? ( View complete question » Problem 8.2 Pierre Dupont just received a cash gift from his grandfather. He plans to invest in a fiveyear bond issued by Venice Corp. that pays an annual coupon of 5.83 percent. If the current market rate is 7.68 percent, what is the maximum amount Pierre should be willing to pay for this bond? (Round answer to 2 decimal places, e.g. 15.25.) Pierre should pay $ Problem 8.3 Knight, Inc., has issued a threeyear bond that pays a coupon of 6.80 percent. Coupon payments are made semiannually. Given the market rate of interest of 5.10 percent, what is the market value of the bond? (Round answer to 2 decimal places, e.g. 15.25.) Market value $ Problem 8.20 Electrolex, Inc., has fouryear bonds outstanding that pay a coupon rate of 5.86 percent and make coupon payments semiannually. If these bonds are currently selling at $912.89. What is the yield to maturity that an investor can expect to earn on these bonds? (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25%.) Yield to maturity % What is the effective annual yield? (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25%.) Effective annual yield % Problem 9.5 Fresno Corp. is a fastgrowing company that expects to grow at a rate of 29 percent over the next two years and then to slow to a growth rate of 12 percent for the following three years. If the last dividend paid by the company was $2.15. What is the dividend for 1st year? (Round answer to 3 decimal places, e.g. 15.250.) D1 $ _x000C_What is the dividend for 2nd year? (Round answer to 3 decimal places, e.g. 15.250.) D2 $ What is the dividend for 3rd year? (Round answer to 3 decimal places, e.g. D3 $ Problem 9.6 Nynet, Inc., paid a dividend of $3.64 last year. The company’s management does not expect to increase its dividend in the foreseeable future. If the required rate of return is 17.0 percent, what is the current value of the stock? (Round answer to 2 decimal places, e.g. 15.25.) Current value $ Problem 9.24 ProCor, a biotech firm, forecasted the following growth rates for the next three years: 35 percent, 28 percent, and 22 percent. The company then expects to grow at a constant rate of 9 percent forever. The company paid a dividend of $1.67 last week. If the required rate of return is 20 percent, what is the value of this stock? (Round intermediate calculations and final answer to 2 decimal places, e.g. 15.25.) Value of stock $ Attachments: Q.-Attachment….docx View less » Sep 11 2015 01:47 PM
