Questions from Corporate Finance


Q: The next dividend payment by Im, Inc., will be $

The next dividend payment by Im, Inc., will be $1.87 per share. The dividends are anticipated to maintain a growth rate of 4.3 percent forever. If the stock currently sells for $37 per share, what is...

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Q: Bond X is a premium bond making semiannual payments. The bond

Bond X is a premium bond making semiannual payments. The bond pays a coupon rate of 6.8 percent, has a YTM of 6.2 percent, and has 13 years to maturity. Bond Y is a discount bond making semiannual pay...

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Q: Both Bond Sam and Bond Dave have 7.1 percent coupons

Both Bond Sam and Bond Dave have 7.1 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 3 years to maturity, whereas Bond Dave has 20 years to maturity. If interest r...

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Q: Given that Hertz was down by 88 percent in the first half

Given that Hertz was down by 88 percent in the first half of 2020, why did some investors hold the stock? Why didn’t they sell out before the price declined so sharply?

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Q: Bond J has a coupon rate of 3 percent. Bond K

Bond J has a coupon rate of 3 percent. Bond K has a coupon rate of 9 percent. Both bonds have 18 years to maturity, make semiannual payments, and have a YTM of 6 percent. If interest rates suddenly ri...

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Q: Williams Software has 6.4 percent coupon bonds on the market

Williams Software has 6.4 percent coupon bonds on the market with 18 years to maturity. The bonds make semiannual payments and currently sell for 106.32 percent of par. What is the current yield on th...

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Q: Uliana Co. wants to issue new 20-year bonds for

Uliana Co. wants to issue new 20-year bonds for some muchneeded expansion projects. The company currently has 6 percent coupon bonds on the market with a par value of $1,000 that sell for $967, make s...

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Q: You purchase a bond with an invoice price of $1,

You purchase a bond with an invoice price of $1,053 and a par value of $1,000. The bond has a coupon rate of 5.3 percent, and there are four months to the next semiannual coupon date. What is the clea...

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Q: You purchase a bond with a coupon rate of 6.4

You purchase a bond with a coupon rate of 6.4 percent, a par value of $1,000, and a clean price of $1,027. If the next semiannual coupon payment is due in two months, what is the invoice price?

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Q: Milton Corp. has 8 percent coupon bonds making annual payments with

Milton Corp. has 8 percent coupon bonds making annual payments with a YTM of 7.2 percent. The current yield on these bonds is 7.55 percent. How many years do these bonds have left until they mature?...

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