1. A bond has a par value of $1,000, a time to maturity of 10 years, and a coupon rate of 8.60% with interest paid annually. If the current market price is $860, what will be the approximate capital gain of this bond over the next year if its yield to maturity remains unchanged?
2. Tolo Co. plans the following? repurchases: $ 9.6million in one? year, nothing in two? years, and $ 21 million in three years. After? that, it will stop repurchasing and will issue dividends totaling $ 25.8million in four years. The total paid in dividends is expected to increase by 3.4 % per year thereafter. If Tolo has 1.9 million shares outstanding and an equity cost of capital of 10.6 % ?, what is its price per share? today?