# Math homework

Round 3

**#1 Homework #4A (Bond Current Yield)**

You paid $1,079 for a corporate bond that has a 14.3 percent coupon rate. What is the bond’s current yield?

*Round the answer to the decimal places in percentage form*

Your Answer

**#2 Homework #4C (Value of the Bond Semi-Annually)**

Pet Food Company bonds pay an annual coupon rate of 10.32 percent. Coupon payments are paid semiannually. Bonds have 18 years to maturity and par value of $1,000. Compute the value of Pet Food Company bonds if the market interest rate on this type of bond is 8.70 percent.

*Round the answer to two decimal places.*

Your Answer:

**#3 Homework #4D (YTM annually, semi-annually)**

What is the yield to maturity of a 30-year bond that pays a coupon rate of 7.54 percent per year, has a $1,000 par value, and is currently priced at $855? Assume annual coupon payments.

*Round the answers to two decimal places in percentage form. (Write the percentage sign in the “units” box).*

*You should use Excel or financial calculator.*

Your Answer:

**#4 Homework #4E (zero-coupon bond)**

Black Water Corp. just issued zero-coupon bonds with a par value of $1,000. The bond has a maturity of 21 years and a yield to maturity of 6.73 percent, compounded annually. What is the current price of the bond?

*Round the answer to two decimal places.*

Your Answer:

**#5 Homework #4F (Bond Yield to Call. YTM and Price after original Issue)**

Dan is considering the purchase of Super Technology, Inc. bonds that were issued 6 years ago. When the bonds were originally sold they had a 28-year maturity and a 6.33 percent coupon interest rate, paid annually. The bond is currently selling for $1,448. Par value of the bond is $1,000. What is the yield to maturity on the bonds if you purchased the bond today?

*Round the answers to two decimal places in percentage form. (Write the percentage sign in the “units” box).*

*You should use Excel or financial calculator.*

Your Answer:

**#6 Homework #4G (Bonds Quotes)**

Assume that today’s date is April 15, 2015. Fresh Bakery Inc. bond is an annual-coupon bond. **Par value of the bond is $5,000.**

How much you will pay for the bond if you purchased the bond today? *The answer should be calculated to two decimal places*

Company |
Price |
Coupon Rate |
Maturity Date |
YTM |
Current Yield |
Rating |

Fresh Bakery | 109.171 | 10.268 | 04-15- 2038 | – | – | AA |

Your Answer:

**#7 Homework #5A (Value and Expected rate of return on preferred stock)**

Potter’s Violin Co. has just issued nonconvertible preferred stock with a par value of %100 and an annual dividend rate of 11.52 percent. The preferred stock is currently selling for $143.83 per share. Which rate of return does the investor expect to receive on this stock if the stock is purchased today?

Round the answer to two decimal places in percentage form

Your Answer

**#8 Homewok #5B (Value of Common Stock, Expected Rate of return on Common Stock)**

The Black Forest Cake Company just paid an annual dividend of $2.93. If you expect a constant growth rate of 3.89 percent, and have a required rate of return of 8.18 percent, what is the current stock price according to the constant growth dividend model?

*Round the answer to two decimal places.*

Your Answer:

**#9 Homework #5C (CAPM, Beta portfolio, Portfolio expected return)**

John invested the following amounts in three stocks:

Security |
Investment |
Beta |

Stock A | $927,100 | 0.60 |

Stock B | $941,123 | 1.38 |

Stock C | $814,188 | 2.28 |

Calculate the beta portfolio.

*Round the answers to two decimal places.*

Your Answer:

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