If you can purchase a municipal bond which returns 5.6%
Municipal Bond not tax
and you are in the 25% tax bracket, what rate of
Corporate are taxed
return would you require on a corporate bond?
TEY= Municipal Rate/ (1 - Tax rate)
TEY= 5.6%/ (1 - 25%)
Municipal has lower interest rate
Analysts have forecasted Gamemasters will grow at a rate of
and investors require a return of 14.5%. What is the value of this
p0= Dividend * (1+ Grow rate)/(Interest-Grow rate)
You are interested in a fast-expanding company that is currently
growing at a rate of 30% and is expected to continue to grow
at that rate for another three years before slowing down to a
rate of 7.5%. If investors expect a return of 12% and the
company recently paid a dividend of $1.75, what is the
(1+I)^nDiv(0)$1.75 I+GCF(1)DiscountDCFG130% 1.30 2.28 =1.75*D291.12 =(1+12%)^1 2.03 =E29/G29G27.50% 1.30 2.9575=E29*D301.2544=G29^22.357700893=E30/G30i12% 1.30 3.84 =E30*D311.404928 =G29^3 2.74 =E31/G3191.84680556=B341.404928=G3165.37474202=E32/G32Stock
value of the stock?
What is the years to maturity on a bond issued November 1, 2001, and due November 1,
What is the price of a zero coupon bond that was issued for $1,000 and
rate0.045=9%/2nper 28.00 =14*2pmt0%pv
matures in 14 years if the market interest rate is 9%? (Calculate as semi-annual)
The Dow Jones closed at 18,641 on November 2, 2016 which was up 311 points
from the day before. What was the percentage change?
% change= New-Old/Old
Dell Computers reported earnings per share to be $5.85 this year. If the
company P/E ratio is 28, what is the price of the stock?
A TIPS bond was issued with a CPI of 122.69 and a coupon of 6.5%.
One year later the CPI is 128.32. What is the par value of the bond
CPI start122.69CPI end128.32coupon 6.50%
and how much interest will be paid (assume semi-annual interest).
Value of bond =Before 1000 (bonds always 1000)
What is the current yield on a bond quoted at 98.91 if the
Quote 98.91Price 989.1
bond pays a coupon of 6.54%?
Coupon 6.54%Interest 65.40
If you buy 200 shares of a stock with bid and ask prices of
$77.23 and $77.28, respectively, how much will you pay?
If Home Depot has an 8.75% preferred stock with a par
6.5%.Dividend $8.75Market rt 6.50%
value of $100, what would you pay if the market rate is
You own a callable bond that pays 10% annual coupon
and it has a one-year interest penalty if it is called early.
Coupon 10%Pay $ 1,100.00
If it is called early, how much will you receive?