8. A bond with a par value of 30,000 is priced at 108.40 of par and has 10 years remaining until maturity. The bond has an 8% coupon rate, paid semi-annually. What is the amount of next coupon payment? A. 600 B. 1200 C. 2400 D. 3252 E. None of above

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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8. A bond with a par value of 30,000 is priced at 108.40 of par and has 10 years remaining until maturity. The bond has an 8% coupon rate, paid semi-annually. What is the amount of next coupon payment?

A. 600  
B. 1200  
C. 2400  
D. 3252  
E. None of above  

9. ABC common stock is expected to have extraordinary growth in earnings and dividends of 25% per year for year 2 and 3, after which the growth rate will settle into a constant 5%. If the required return by investors is 13% and next year’s dividend is 4. What should be the approximate current share price?

A. 60.58  
B. 65.10  
C. 68.64  
D. 73.56  
E. None of above  

10. An investor receives a 15% total return by purchasing a stock for 40 and selling it after one year with a 5% capital gain. What is the selling price after one year?

A. 40  
B. 42  
C. 44  
D. 46  
E. None of above  

11. A stock has the following information. What is the stock price?
- Required rate of return: 14%
- ROE: 15%
- Plowed back ratio: 40%
- Expected dividend: 1

A. 12.5  
B. 13.5  
C. 14.5  
D. 15.5  
E. None of above
Transcribed Image Text:8. A bond with a par value of 30,000 is priced at 108.40 of par and has 10 years remaining until maturity. The bond has an 8% coupon rate, paid semi-annually. What is the amount of next coupon payment? A. 600 B. 1200 C. 2400 D. 3252 E. None of above 9. ABC common stock is expected to have extraordinary growth in earnings and dividends of 25% per year for year 2 and 3, after which the growth rate will settle into a constant 5%. If the required return by investors is 13% and next year’s dividend is 4. What should be the approximate current share price? A. 60.58 B. 65.10 C. 68.64 D. 73.56 E. None of above 10. An investor receives a 15% total return by purchasing a stock for 40 and selling it after one year with a 5% capital gain. What is the selling price after one year? A. 40 B. 42 C. 44 D. 46 E. None of above 11. A stock has the following information. What is the stock price? - Required rate of return: 14% - ROE: 15% - Plowed back ratio: 40% - Expected dividend: 1 A. 12.5 B. 13.5 C. 14.5 D. 15.5 E. None of above
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