If the current inflation rate is 6,5%; the real rate of interest is 3,0% and you have spotted an investment opportunity that pays 12%, what would the risk premium associated with the investment be?

If a bond has a coupon rate that is higher than its yield to maturity and has five years left to maturity, which of the following options would best describe its current selling price?

Vibrant Eagle Ltd outstanding bonds have R1 000 par value and they mature in 20 years. Their yield to maturity is 8%, they pay interest semi-annually and they sell at a price of R670. What is the bond’s coupon interest rate?

Lend Ladder Ltd has just issued a zero coupon bond with a life of 16 years. The par value of these bonds is R100 000 and the market rate is 12%. What would be the price of these bonds?

Vaultex Clothing Manufacturing will pay a dividend of R3,80 per share next year. The company pledges to increase its dividend by 2,4% indefinitely. How much would you be willing to pay to purchase this company's share today if you require a 6,9% return on your investment?

Pumpkin Farms Company has R85 000 000 in assets, R40 000 000 in liabilities and R45 000 000 in ordinary shareholders’ equity. It has 1 400 000 ordinary shares outstanding. The replacement cost of the assets is R115 000 000. What is Pumpkin’s book value per share? 

Pioneer Plastics had a free cash flow of R100 000 this year and expects this to grow by 7% each year for the foreseeable future. The company has a weighted average cost of capital of 11%. What is the value of the company today?

Growth Alley Productions pays no dividend at the present time. The company plans to start paying an annual dividend of R0,40 a share for two years, commencing four years from today. After that time, the company plans on paying a constant R0,75 a share annual dividend indefinitely. How much are you willing to pay to buy a share of this stock today if your required return is 11,60%? 

Bluebliss Healthcare preference shares are expected to pay a dividend of

R9,80 per share forever and the required rate of return for the company is 11%.

What would the market price of the share be?

AgribusinessQuest

last dividend paid was R2 with a dividend growth rate expected to remain at 15%

for two years, then grow at 10% for one year, and finally settle at a constant

growth rate of 5%. The company's shares have a market beta of 2, with a market

risk premium of 3% and a risk-free rate of 5%. What is the company’s current

share price?