The bold are the answers. Can you please show me how to solve each one? Thanks A

Question

The bold are the answers. Can you please show me how to solve each one? Thanks

A year ago, an investor purchased 500 shares of Nevada Casinos, Inc. preferred stock at a price of $27.00/share. The firm has just paid its annual dividend of $4.10. Now the share is priced at $21.60 in the market. What is the dividend yield of the stock based on its current price? a) 20.00% b) 38.98% c) 18.98% d) 1.02% e) 15.19% One year ago you purchased a zero coupon bond and paid $750 for it. It now has 5 years remaining to maturity, and its yield to maturity is 8%. Its face value is $1,000. Find the change in dollar value of the bond in this period. Use semi-annual compounding. a) $680.58 b) $719.33 c) $-74.44 d) $715.29 c) $-69.42 Utah Mining and Minerals has some bonds outstanding, currently with 20 years remaining to maturity. The coupon rate is 15%, and the interest is paid monthly. The face value of the bonds is $1,000. How much interest must the firm pay on each outstanding bond each month? a) $37.50 b) $12.50 c) $50.00 d) $75.00 e) $150.00 Amy's Home Crafts just paid a dividend, D_0, of $1.30/share on its common stock. Investors expect that its dividend will grow at a constant rate of 4% per year, and they require a return of 15% on this stock. What is the value of this stock based on the discounted dividend model? a) $8.67 b) $1.25 c) $12.29 d) $9.01 c) $11.82

Explanation / Answer

5)

a. = $4.10 / 21.60 = 18.98%

b. = as semi-annual compounding, interest gets hafed and period doubled.

so, Price of the bond = $1000 * PVIF(4%,10YRS) = $1000 * 0.6756 = 675.6 - 750 = $74.44

c. = $1000 * 15%/12 = 150 /12 = $12.5

d. = 1.30 * (1 + 0.04) / 0.15 - 0.04 = $12.29

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