March 18th, 2019 
adminSTOCK AND BOND SCENARIOS
IRX Company just purchased a five year zero coupon Treasury bill at $900. If the face value is $1000 what is the yield to maturity?
IBMs last dividend was $3.00 per share for common stock. If the required rate of return on common stock rs is 11% and dividend is expected to grow at a constant rate of 10% a year what is the stocks current value per share?
General Electric issued bonds that mature in 15 years at 12% coupon rate and a par value of $1000. If the yield to maturity is 9% at what price should the bonds sell?
ABC Company pays dividends of $2.00 per share for its preferred stock outstanding and the required rate of return on preferred stock rg is 15%. Considering there is no growth in dividends at what price should the preferred stock sell?
Lee Enterprises bonds currently sell for $1200 with 12 years left to maturity. If the yield to maturity is 5.66% and the face value is $1000 what should be the annual coupon payment?
Jones Keys is expected to pay a dividend of $1.50 at the end of the year (that is D1 = $1.50) and the dividend is expected to grow at a constant rate of 8% a year. If its required return is 12% what is the expected price of the stock three years from today?
Last year IBM paid dividends of $2 per share on its common stock that currently sells for $70 per share. If investors expect earnings and dividends to grow at a constant rate of 10% in the future what should be the required return on common stock?
If Exxons preferred stock pays a dividend of $15 per share and can be sold to the public at a price of $75 per share what is the required return?
XYZ Founders Inc. has perpetual preferred stock outstanding that sells for $120 a share and pays a dividend of $12 at the end of each year. What is the required rate of return?
Brown Enterprises bonds currently sell for $1250. They have a 15-year maturity an annual coupon of $65 and a par value of $1000. What is their current yield?
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