Problem 1) Valuation - zero-coupon bond
A U.S. Government bond has a face amount of $10,000 with 8 years to maturity, yielding 3.5%. What is the current selling price?
Problem 2) Valuation - corporate bond
A $1,000 corporate bond with 20 years to maturity pays a coupon of 7% (semi-annual) and the market required rate of return is either a) 6.6% or b) 13%. What is the current selling price for both a) and b)?
Problem 3) 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% or b) 10%. What is the current selling price for a) and b)?
Problem 4) Valuation - Constant growth - common stock.
What is the value of a share of common stock that paid $1.60 last year, with a growth rate of 7%, assuming the risk free rate is 4%, the market return is 9% and the beta is 1.4?
Problem 5) Valuation - zero-coupon bond
A U.S. Government bond has a face amount of $10,000 with 13 years to maturity, yielding 5.5%. What is the current selling price?