Solution Banyan Tree Corporation has bonds on the market with years to maturity a YTM of a face value of

Solution Banyan Tree Corporation has bonds on the market with years to maturity a YTM

bonds on the market with years to maturity a YTM of a face value of and a current price of The

Solution Banyan Tree Corporation has bonds on the market with years to maturity

a YTM of a face value of and a current price of The

Solution Banyan Tree Corporation has bonds on the market with

Solution Banyan Tree Corporation has

Category: | General |

Words: | 1050 |

Amount: | $12 |

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Paper instructions

Q. 1 Banyan Tree Corporation has bonds on the market with 30 years to maturity, a YTM of 9%, a face value of $1,000 and a current price of $899.89. The bonds make quarterly payments. 3 years later, the YTM becomes 11%, what is the value of the bond and the current yield at that time?Q. 2 Bond XP is a premium bond with a 12% coupon. Bond XD is a 6% coupon bond currently selling at a discount. Both bonds make annual payments, have a YTM of 9%, and have five years to maturity.(a)? If interest rates remain unchanged, what are the bond prices this year and next year, current yield this year, and expected capital gains yields over the next year for both bonds? (b) Explain the interrelationships among current yields, capital gains yields, and YTM based on the previous part findings?Q.3 Silicon is a blue chip company listed on NASDAQ and since it has businesses in more than 60 countries, it is expected that it can distribute stable dividends with a growth rate of 2% every year and the market expects it can generate 5% return on the common stock. The dividends of the common stock just distributed were $5 per share.(a) What is the common stock price today?(b) What is the theoretical common stock price 3 years later?(c) Silicon also issued preferred shares (constant dividends paid every year forever) with a stated value of $100 each with 5% dividends 5 years ago and the next dividend will be paid today and you will receive the dividend. The required return on the preferred stock is 3%.What is the price of the preferred stock today?I am in urgent need of answer of these three questions. Thanks!!!!

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