1) Heginbotham Corp. issued 20-year bonds two years ago at a coupon rate of 5.3 percent. The bonds make semiannual payments. If these bonds currently sell for 105 percent of par value, what is the YTM?
2) Your broker has quoted a stock you are interested in at 8 1/2. He says that the B of D just announced a dividend of 15.2% on the CS. (par value $.955), and the company has been growing at a rate of 4.89% fot the past 10 years. As long as you make a return of 4 7/8 % over the CPI index you would be happy with an investment. Would you buy this stock?
3) You own 2 1/2 round lots of GM preferred (par=7.50), and you just received a dividend check for $61.50. If you require a return of at least the Prime Rate on investments, what should be the price of your stock now in the market place?
4) The price of XYZ Preferred is quoted at $2 3/13 in the Pink Sheets. You know that the stock just paid a $2.75 dividend on a round lot of stock, which represented a quarterly dividend rate of 1.5% You originally brought the stock because you expected it to pay you a 12.5% return. What is the par value of this preferred?