Apocalyptica corp pays a constant 11 dividend on its stock


1. Apocalyptica Corp. pays a constant $11 dividend on its stock. The company will maintain this dividend for the next 4 years and will then cease paying dividends forever. Required: If the required return on this stock is 13 percent, what is the current share price?

2. Grohl Co. issued 13-year bonds a year ago at a coupon rate of 11 percent. The bonds make semiannual payments. If the YTM on these bonds is 10 percent, what is the current bond price?

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Financial Management: Apocalyptica corp pays a constant 11 dividend on its stock
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