Q. 1 - A bond with semi-annual coupon payments of $1100 has 5 years to maturity and a yield to maturity of 8%: If the price of this bond is $18202:61, what is its face value? A) $20292:34 B) $13737:59 C) $17830:71 D) $20340:95 E) $20467:12
Q. 1 - A bond with semi-annual coupon payments of $1100 has 5 years to maturity and a yield to maturity
of 8%: If the price of this bond is $18202:61, what is its face value?
A) $20292:34
B) $13737:59
C) $17830:71
D) $20340:95
E) $20467:12
Q 2 - A bond,which is currently trading at $3440, has four years to maturity, a $4000 face value, and a 3.5%
coupon rate with annual coupons. Which of the following is its approximate yield to maturity?
A) 3.84%
B) 3.5%
C) 7.7%
D) 5%
E) 3.01%
Q 3 - Canadian Tire just announced that it plans to reduce its dividend from $2.50 to $1.50 per share
and use the extra funds to expand its operations. Prior to this announcement, Canadian Tire.s dividends
were expected to grow at 4% per year and Canadian Tire.s stock was trading at $25.00 per share. With
the new expansion, Canadian Tire.s dividends are expected to grow at 8% per year inde.nitely. Assuming
that Canadian Tire.s risk is unchanged by the expansion, the value of a share of Canadian Tire after the
announcement is approximately:
A) $25.00
B) $15.00
C) $31.25
D) $27.50
E) $29.75
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