The Risk Free Rate of Return is 2%. The Expected % Return on the General Market is 20%, and Firm A's Common Stock tends to be half as volatile as. the General Market. The stock just paid a Dividend of $ 3.00 Per Share. The Growth Rate in both Year 1 and Year 2 is projected to be 6%. Beyond that point, no annual growth is expected (indefinitely). Given this information, please determine the Stock Price for Firm A's Common Stock.
Now complete Problem # 1 (above) assuming that (it is) the Market Premium (that) is 20%. Under this scenario, what is the Expected % Return on the General Market?
Firm B plans to issue a 3 year Bond, with Interest paid semi-annually. The Coupon Rate is 4%, and the Yield To Maturity is 8%. Based upon this information, at what Price should Firm B expect to sell each Bond?