What is the required rate of return for com-usa stock

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Question 1: Bonds of Lowell Inc. are selling in the market for $1,678.23. These bonds carry a 9.5% coupon rate, paid quarterly, and have 10 years remaining to maturity. What is the bond's yield to maturity?

Question 2: COM-USA Inc. has been maintaining growth rate of 4% in its dividends, which is expected to continue indefinitely. The company just paid a dividend of $3.00 per share and its stock is priced at $100 per share.

What is the required rate of return for COM-USA stock?

Question 3: Database Software Inc. (DSI) and US Data Inc. (USD) have outstanding bonds that have 10 years to maturity and a coupon rate of 5%. They are in the same risk class. The only difference in these bonds is that DSI bond has a quarterly coupon payment, while USD bond has a semiannual coupon payment. The market price of the DSI bond is $1,082.09.

What should be the value of a USD bond?

Reference no: EM132592291

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