FIN 111 (DB125) Introductory Principles of Finance
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A Group is planning to fund a development project by issuing 10-year zero coupon bonds with a face value of $1000. Assuming semiannual compounding, what will be the price of these bonds if the appropriate discount rate is 16 per cent?
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ABC Ltd is issuing a 10-year bond with a coupon rate of 6 per cent. The interest rate for similar bonds is currently 5 per cent. Assuming annual payments, what is the present value of the bond?
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Muznah is interested in buying a 5-year zero coupon bond whose face value is $1,000. She understands that the market interest rate for similar investments is 7 per cent. Assume annual compounding for payments. What is the current price of this bond?
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A US-based company, has a 5-year bond whose yield to maturity is 6.5 per cent. The bond has no coupon payments. What is the price of this zero coupon bond?
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Grantham Ltd declared a dividend of $2.10 yesterday. The company is expected to grow at a steady rate of 4 per cent for the next few years. If shares such as these require a rate of return of 11 per cent, what should be the market value of this share?
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Riverland Ltd has issued perpetual preference shares with a $100 par value. The bank pays a semiannual dividend of $2.80 on a share. What is the current price of this preference share given a required rate of return of 12 per cent?
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The preference shares of Arab Tours Pty Ltd are selling currently at $37.48. If your required rate of return is 11 per cent, what is the dividend paid by this share?
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The European Treasury has issued 10-year zero coupon bonds with a face value of $1,000. Assume that coupon payments are semiannual. What will be the current market price of these bonds if the opportunity cost for similar investments in the market is 8.25 percent? (Round to the nearest dollar.)
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The current share price of Arzo Ltd is $41.92. If the required rate of return is 12 per cent, what is the dividend paid by this company, which is not expected to grow in the near future?
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An airlines has a perpetual preferred stock that pays a dividend of $5 per year. Investors required an 12% return on similar investments. What is the value of the company’s preferred stock?
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