Calculate the current price of value bond

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Reference no: EM132029570

1. Calculate the current price of a $5,000 par value bond that has a coupon rate of 17 percent, pays coupon interest quarterly (i.e., 4 times per year), has 26 years remaining to maturity, and has a current yield to maturity (discount rate) of 6 percent. (Round your answer to 2 decimal places and record without dollar sign or commas).

2. Pharsalus Inc. just paid a dividend (i.e., D0) of $ 2.34 per share. This dividend is expected to grow at a rate of 7.4 percent per year forever. The appropriate discount rate for Pharsalus's stock is 10.5 percent. What is the price of the stock? (Round your answer to 2 decimal places and record your answer without dollar sign or commas).

Reference no: EM132029570

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