Answer:
if YTM at 4% price : $2,902.1237
if YTM at 8% price : $1,788.0448
The bonds are above face value asthey offer a higher coupon payment than the market yield therefore the bond holders are willing to pay above theri face value
Explanation:
the market price of the bond will be the present value of coupo payment and maturity:
C 150.000
time 30
rate 0.04
PV $2,593.8050
Maturity 1,000.00
time 30.00
rate 0.04
PV 308.32
PV c $2,593.8050
PV m $308.3187
Total $2,902.1237
No we repeat the process with the yield at 8%
C 150.000
time 30
rate 0.08
PV $1,688.6675
Maturity 1,000.00
time 30.00
rate 0.08
PV 99.38
PV c $1,688.6675
PV m $99.3773
Total $1,788.0448
Enterprise, it's called an enterprise
<span>Demand-pull inflation is asserted to arise when aggregate demand in an economy outpaces aggregate supply. It involves inflation
rising as real gross domestic product rises and unemployment falls, as
the economy moves along the Phillips curve. This is commonly described
as "too much money chasing too few goods".</span>
Trade restrictions tend to preserve relatively few jobs in the protected industries and lead to job losses in other industries. Trade restrictions can vary from quotas, embargoes, standards, subsidies, tariffs and more that make it hard to trade (important/export) goods between two companies and also set prices for these. Depending on what is allowed and what is not different industries can benefit from the trade restrictions and some can be harmed by them.
Answer:
Do = $2.00
D1= Do(1+g)1 = $2(1+0.1)1 = $2.20
D2= Do(1+g)2 = $2(1+0.1)2 = $2.42
PHASE 1
V1 = D1/1+ke + D2/(1+ke)2
V1 = 2.20/(1+0.11) + 2.42/(1+0.11)2
V1 = $1.9820 + $1.9641
V1 = $3.9461
PHASE 2
V2 = DN(1+g)/ (Ke-g )(1+k e)n V2 = $2.42(1+0.03)/(0.11-0.03)(1+0.11)2
V2 = $2.4926/$0.0649
V2 = $38.4068
The current stock price is calculated as follows:
Po = V1 + V2
Po = $3.9461 + $38.4068
Po = $42.35
Explanation: This question relates to valuation of shares with 2-phase growth model. The value of shares in the first phase will be determined by discounting the dividend for the 2 years by cost of equity. The dividends for year 1 and year 2 were obtained by subjecting the current dividend paid (Do) to growth rate.
Moreso, the value of shares for the second phase was calculated by considering the last dividend paid(D2) and then subject it to the new growth rate. The adjusted dividend was then capitalized at the appropriate discount rate of the company.