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What is the intrinsic value of the stock today

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Reference no: EM132509656

a) A coupon bond pays annual interest, has a par value of $1,000, matures in 12 years, has a coupon rate of 11%, and has a yield to maturity of 12%. What is the the current yield on this?

b) Lifecycle Motorcycle Company is expected to pay a dividend in year 1 of $2, a dividend in year 2 of $3, and a dividend in year 3 of $4. After year 3, dividends are expected to grow at the rate of 7% per year. An appropriate required return for the stock is 12%. Using the multistage DDM, what is the intrinsic value of the stock today?

Reference no: EM132509656

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