Equity cost of? capital-consider zero-coupon bond

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Reference no: EM131322772

1) Jumbuck Exploration has a current stock price of $2.20 and is expected to sell for $2.31 in one? year's time, immediately after it pays a dividend of $0.23. Which of the following is closest to Jumbuck? Exploration's equity cost of? capital?

A. 7.73?%

B. 9.28?%

C. 15.46?%

D. 19.33?%

2) Consider a? zero-coupon bond with a $100 face value and 10 years left until maturity. If the YTM of this bond is5.3?%, then the price of this bond is closest? to:

A. $83.53

B. $100.00

C. $71.60

D. $60.00

3) A company issues a? ten-year bond at par with a coupon rate of 6.6?% paid? semi-annually. The YTM at the beginning of the third year of the bond? (8 years left to? maturity) is 8.2?%. What is the new price of the? bond?

A. $907

B. $1,270

C. $1,089

D. $1,000

Reference no: EM131322772

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