BUS 401 Week 2, DQ 2, Bond and Common Stock
BUS 401 Week 2, DQ 2, Bond and Common Stock fin571
Popular in Department
This 0 page Study Guide was uploaded by an elite notetaker on Wednesday November 11, 2015. The Study Guide belongs to fin571 at Kaplan University taught by in Fall 2015. Since its upload, it has received 24 views.
Reviews for BUS 401 Week 2, DQ 2, Bond and Common Stock
Report this Material
What is Karma?
Karma is the currency of StudySoup.
You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!
Date Created: 11/11/15
Bonds and Common Stock From Chapters 7 and 8 complete Study Problems 78 pages 224225 and 816 page 253 and post the answers to the discussion board Remember to complete all parts of the problems and report the results of your analysis Do not forget to show the necessary steps and explain how your attained that outcome Respond to at least two of your classmates pos ngs 78 Bond valuation ExxonMobil 20year bonds pay 9 percent interest annually on a 1000 par value If bonds sell at 945 what is the bonds expected rate of return Annual interest 90 Annual amortization of purchase discount 5520yrs 275 Total annual return 9275 Annual Yield 9275945 9788 816 Common stock valuation The common stock of NCP paid 132 in dividends last year Dividends are expected to grow at an 8 percent annual rate for an indefinite number of years The common stock of NCP paid 132 in dividends last year Dividends are expected to grow at an 8 percent annual rate for an indefinite number of years a If NCP39s current market price is 2350 per share what is the stocks expected rate of return D1 132 x 108 14256 ReD1g P0 14256 008 1407 b If you required rate is 105 percent what is the value of the stock for you Investor39s Value Dividend in year 1 Required Rate of return growth rate 1 321 08 0105008 5702 0 Should you make the investment Yes the expected rate of return of 14 is greater than the required rate of return of 105 o and the value of the stock 5702 is larger than the current market price 2350
Are you sure you want to buy this material for
You're already Subscribed!
Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'