What is the capital gains yield on these bonds

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Reference no: EM132743606

Questions -

Q1. A 20-year, $1,000 par value bond has a 7.50% coupon rate with interest paid semiannually. The bond currently sells for $900. What is the capital gains yield on these bonds?

Q2. U.S. Treasury 30 year maturity, zero coupon bonds are currently selling in the marketplace with a yield to maturity of 7.00%. Even though the bonds have a coupon rate of 0.00%, please assume semi-annual compounding, which is the bond market convention? If inflation increased unexpectedly, forcing the nominal required rate of return on these Treasury bonds to increase by 1.50% to 8.50%, by what dollar amount would the current market price of these bonds decrease?

Q3. A share of common stock has just paid a dividend of $4.50. If the expected long-run growth rate for this stock is 3%, and if investors' required rate of return is 10.5%, what is the stock's intrinsic value?

Q4. M. Roussakis Inc.'s stock currently sells for $35.00 per share. The stock's dividend is projected to increase at a constant rate of 4% per year. The required rate of return on the stock, rs, is 14.50%. What is Roussakis' expected price 5 years from now?

Reference no: EM132743606

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