Fin 571

Complete the problem sets and show all steps Chapter 5 Question A3 (Bond valuation) General Electric made a coupon payment yesterday on its 6.75% bonds that mature in 8.5 years. If the required return on these bonds is 8% APR, what should be the market price of these bonds? Question A5 (Yield to maturity) New Jersey Lighting has a 7% coupon bond maturing in 17 years. The current market price of the bond is $975. What is the bond’s yield to maturity? Question A11 (Expected return) Northern States Power has a projected dividend of $3.60 next year. The current stock price is $50.50 per share. If the dividend is projected to grow at 3.5% annually, what is the expected return on Northern States stock? Question A16 (Growth rate) Suppose Toshiba has a payout ratio of 55% and an expected return on its future investments of 15%. What is Toshiba’s expected growth rate? Question B2 (Yield to maturity) GMAC’s 8.75% bonds closed yesterday at $952.50. If these bonds mature in 11 years, what is the yield to maturity of these bonds? What is their APY? Chapter 7 Question C3 (Fama-French Three-Factor Model) Using the Fama-French three-factor model, what are the expected returns for Ducca Computing and Lincoln Bank using this information? The riskless return is 4.3%