1. A firm has a common stock with a market price $55 per share and an expected d
ID: 2669523 • Letter: 1
Question
1. A firm has a common stock with a market price $55 per share and an expected dividend of $2.81 per share at the end of the coming year. The dividends paid on the outstanding stock over the past five years are as follows:Year Dividend
1 $2.00
2 $2.14
3 $2.29
4 $2.45
5 $2.62
The cost of the firm's common stock equity is?
2. Use the below information to answer the following question
Company-Ford
Coupon-11.0
Maturity-July 31,2009
Last Price- 65.50
Last yield- ?
EST Spread- 104
EST UST- 10
VOL (000's)- 5,100
Based on the above table, what is the last yield for this bond?
Explanation / Answer
2. Use the below information to answer the following question
Company-Ford
Coupon-11.0
Maturity-July 31,2009
Last Price- 65.50
Last yield- ?
EST Spread- 104
EST UST- 10
VOL (000's)- 5,100
Based on the above table, what is the last yield for this bond?
COUPON RATE ---------11%
FACE VALUE OF BOND= 1000 DOLLARS
LAST PRICE OF THE BOND- 65.5%
ANSWER : BOND PRICE== 655 DOLLARS
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