(Answered)-Consider the three bonds described here. BON KF BON TA BON SG - (2025 Updated Original AI-Free Solution
Question
- Consider the three bonds described here.
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| ? | BON KF | BON TA | BON SG |
| Maturity | 10 year | 10 year | 20 year |
| Annual coupon rate (payable semiannual) | 6% | 8% | 6% |
| Par Value | RM1, 000 | RM1, 000 | RM1, 000 |
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a. If all three bonds a required of 8 %, what will be each bond?s price?
b. Which bonds are selling at a discount? At a premium? A par?
c. If required returns on these bonds all rise to 10%, what are their new prices?
d. If Bond?KF?were selling for RM1,065, what would be its yield to maturity and current yield?
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2. A corporate bond with a RM1,000 face value pays a RM50 coupon every six months. The bond will mature in ten years, and has a nominal yield to maturity of 9 percent. What is the price of the bond?
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3. FEMSA Corporation recently issued 20-year bonds. The bonds have a coupon rate of 8 percent and pay interest semiannually. ?Also, the bonds are callable in 6 years at a call price equal to 115 percent of par value. The par value of the bonds is RM1,000. ?If the yield to maturity is 7 percent, what is the yield to call?
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4. The Francis Company is expected to pay a dividend of D?= RM1.25 per share at the end of the year, and that dividend is expected to grow at a constant rate of 6.00% per year in the future.? The company's beta is 1.20, the market risk premium is 5.50%, and the risk- free rate is 4.00%.? What is the company's current stock price?
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5. NASHORA Incis presently in a stage of abnormally high growth because of a surge in the demand for motor homes. The company expects earnings and dividends to grow at a rate of 20 percent for the next 4 years, after which time there will be no growth (g = 0) in earnings and dividends. The company's last dividend was $2.50. NASHORA's beta is 1.6, the return on the market is currently 12.75 percent, and the risk-free rate is 4 percent. What should be the current price per share of common stock?