Determine the yield to maturity on the bonds

Assignment Help Corporate Finance
Reference no: EM13198082

Research online trading sites and DRIPS as outlined below, and summarize your findings. Make sure to include a summary table of the relevant information.

1. Search three online trading sites, and determine the requirements for trading, including the price per trade. Compare and contrast the online trading companies.

2. Search the Web for three companies (look for investor information) that offer DIPs or DRIPs.

3. Compare and contrast the requirements, including minimum investments, nature of the return, costs, and other features.

Part B: Research Market Data on Bonds

Research the current (within the last two months) market data on bonds from AT&T, Dell, and IBM. Assume each bond has a par value of $1000, unless otherwise indicated. Cite your sources.

Required:

1. Complete the table above.

2. Calculate the value of the bond if your required return is 5% on AT&T, 6.5% on Dell, and 8% on IBM.

3. Determine the yield to maturity (YTM) on the bonds given the current price. Based on each bond's ratings and your determination of its yield to maturity, explain how you rank each bond for risk and return.

1. Stock. What is the value of a stock with a
a. $2.50 dividend just paid and an 8% required return with 0% growth?
b. $3 dividend just paid and a 8% required return with 2% growth?
c. $7 dividend to be paid and a 10% required return with 2% growth?

2. Stock. What is the required rate of return on a stock with a
a. $2.50 expected dividend and a $19 price with 6% growth?
b. $2.75 expected dividend and a $20 price with 8% growth?
c. $2.50 expected dividend and a $19 price with 9% growth?

3. Stock. What is the growth rate of the stock with a
a. $3.00 expected dividend and a $20.60 price with 15% required return?
b. $2.40 expected dividend and a $25.35 price with 10% required return?
c. $2 expected dividend and a $8.30 price with 11% required return?

Reference no: EM13198082

Questions Cloud

Stock according to the security market line : What is your total return on the stock? What is the dividend yield? What is the capital gains yield and what is the expected return of the stock according to the security market line?
Will sec file anything against ellen for her sales of josb : Ellen's previous trading activity shows that she made it a normal practice to vigorously trade the stock of any company with which she did business.Do you think the SEC will file anything against Ellen for her sales of JOSB.
Explain center for writing excellence : Review the information about thesis statements in the Center for Writing Excellence. Identify your point of view and the point you will prove in your paper.
Explain interactive media : What are the things you enjoy most about this course? The course help me get a better understanding on the world religion.
Determine the yield to maturity on the bonds : Compare and contrast the requirements, including minimum investments, nature of the return, costs, and other features and determine the yield to maturity (YTM) on the bonds given the current price. Based on each bond's ratings and your determination..
Define the transmission engages and the truck crashes : a driver for City Delivery Company, carelessly leaves the truck's motor running while he makes a delivery. The transmission engages and the truck crashes into a nearby gas station pump, igniting a fire that spreads quickly to a construction site a..
Do you see madeas eyes turning green : Madea was a beautiful woman even in her late year with dimples and a beautiful smile; although her eyes were a source of fear for us children. When my brothers and I would visit my Grandmother and argue or fight.
Explain modern quality practices : Students will research Ishikawa's life and work to determine the impact he has had on the world. Students will define his significant contributions to modern quality practices in terms of major impacts in a specific organization. The project will ..
Describe qualities required for editing : Discuss qualities required for editing such as attention to detail, patience, organization, and so on, and describe how you can strengthen the qualities necessary to edit well and to improve the quality

Reviews

Write a Review

Corporate Finance Questions & Answers

  Effect of leverage on creditors and share holders

Effect of leverage on creditors and share holders - As the firm levers up, how does the increase in value get apportioned between the creditors and the shareholders?

  Prepare a new cardiac surgery program

Ted Jones, the Surgery Unit Director, is about to choose his strategy for creating a capital expenditure funding proposal for the coming year.

  Find the present value

Determine the present value if $5,800 received at the end of first year, $6,400 received at the end of second year, and $8,700 at the end of third year.

  Construct time series plot

Use the information to construct time series plot and also Use Excel Solver to make quadratic trend equation to forecast team value.

  Calculate the value of a share of stock

Joker stock has a sustainable growth rate of 8%, ROE of 14 percent, and dividends per share of $ 1.65. If the P/E ratio is 19, calculate the value of a share of stock?

  What is the after-tax cost of debt

Assuming a $4 dividend paid annually, what is the required return for preferred shareholders (i.e. component cost of preferred stock)?  (assume floatation costs = $0.00)

  Finding true or false statements

Finding true or false statements. The primary role of organized security exchanges is to increasing capital (money) for firms.

  Calculate the expected returns on the stock market

What value would James estimate for this firm and what value would Bret assign to the Medtrans stock and calculate the expected returns on the stock market and on Chicago Gear stock.

  Explain the limitations of using a break-even point

What is the role provided by a break-even point and how would you calculate this point? and also explain the limitations of using a break-even point and how would you incorporate this point with management strategic planning?

  Evaluate and interpret the two profit variances

Evaluate and interpret the two profit variances and evaluate and interpret the two revenue variances

  Calculate beta for new portfolio

Suppose you hold a diversified portfolio consisting of a dollar 10,000 investment in each of 15 different common stocks. The portfolio beta is = 0.9. Calculate beta for new portfolio.

  Multiple choice questions on managerial finance

What yearly rate of return would Grandma Zoe need to earn if she deposits dollar 1,000 per month into an account starting one month from today in order to have a total of $1,000,000 in thirty years ?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd