An expression of the activity of a process as the number of units that would have been processed during a period if all effort h
1 answer:
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Answer:
$1003.92
Explanation:
The invoice price is calculated as the reported price plus the accrued interest. Therefore, the formula for accrued interest is shown below:
Given that the coupon rate is 8%, therefore the bond pays $80 of coupon payments every year.
January 14 was the day that the last coupon was paid, so it has been 14 days since the last payment.
The coupon period is 182 days.
Therefore, the accrued interest is
The invoice price is calculated as:
$1000.625 + $3.297
= $1003.922.
Therefore the invoice price of the bond is $1003.92
Answer:
9.09%
Explanation:
Use Gordon growth model of stock valuation to find the required rate of return;
Price = D1/ (r-g)
this can also be written as
whereby,
Price = $35.41
D0 = Current dividend = 1.38
D1 = Next year's dividend = 1.38(1.05) = 1.449
g = growth rate = 5% or 0.05 as a decimal
r = required return = ?
Rewrite the formula <em>"Price = D1/ (r-g) " </em>to find <em>r;</em>
r =
r =
as a percentage, the required return = 9.09%