7n wWhat is the approximate yield to maturity of a $1,000 par value and pays ann

Question

7n wWhat is the approximate yield to maturity of a $1,000 par value and pays annual coupon of 12 percent? bond if t is selling for $970, matures in 6 years A) 1.27% B) 1296 C) 12.75% D) 1 5% 8) AllSports Corp issued $1,000 par value bonds bearing a coupon rate of 10% APR, but with interest paid semi- annually. The bonds have 4 years remaining to maturity and a current price of $940 per bond. What is the bonds annual yield to maturity? A 16.00% B) 5.96% C) 11.97% D) 1 1.93% 9) Seven years ago, you bought one Bitcoin for $1. Today, you sold your Bitcoin at a price of $5,800. What is your annualized rate of return from this investment? A) 5,799% B) 828.43% C) 244.85% D) 33.97% J0 are promised a fixed periodic dividend that must be paid prior to paying any common stock 10) dividends. A) Preferred stockholders B) Common stockholders C) Bondholders D) Creditors 1)A6% preferred stock with a market price of Sloper share and $100 par value cames a cash dividend of A) $10.00 B) $6.00 C) $6.60 D) S0.60 12) Shares of stock currently owned by a firm's shareholders are called A) authorized shares B) issued shares C) outstanding shares D) treasury shares 13) Treasury stock refers to the A) sale of stock at a price greater than the par value B) stock issued by the US government C) firm's repurchase of own outstanding stock D) authorization of additional shares of stock by the firm's board of directors

Explanation / Answer

7 Option C

Coupons=12%*1000=120..N=6..FV=1000..Price=970...970=120/(1+r)+120/(1+r)^2+120/(1+r)^3+120/(1+r)^4+120/(1+r)^5+(1000+120)/(1+r)^6..hence, r=12.75%

8 Option D

Coupons=10%*1000/2=50..N=4*2=8..FV=1000..Price=940..940=50/(1+r/2)+50/(1+r/2)^2+50/(1+r/2)^3+50/(1+r/2)^4+50/(1+r/2)^5+50/(1+r/2)^6+50/(1+r/2)^7+1050/(1+r/2)^8..hence, r=11.93%

9 Option C..return=(5800/1)^(1/7)-1=2.4485=244.85%

10 Option A..Preferred stock holders are promised fixed dividends before any payment to common shareholders

11 Option B..Dividend=Parvalue*Rate=100*6%=6

12 Option C..Outstanding shares: company's stock held by all the shareholders

13 Option C....A treasury stock is stock which is bought back by issuing company, reducing amount of outstanding stock in open market

Related Questions

Navigate

• Browse (All)
• Browse 7
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.