Seattle Inc%u2019s bond carries a 15 percent coupon, pays interest annually, and

Question

Seattle Inc%u2019s bond carries a 15 percent coupon, pays interest annually, and has 20 years to maturity. What is the bond's yield to maturity if the bond is selling for $850.75?           

      9.70%
                                         17.75%
                                         12.23%
                                         8.08%

Bunge, Inc. issued a 30-year bond which is callable in 15 years. It has a coupon rate of 8% payable annually, has a call premium of $125, and is currently selling for $950. What is the yield to call?           

     9.05%
                                         8.00%
                                         10.50%
                                         12.11%

The L-S Mining Company is expected to pay a dividend of $6 per share at the end of year 1(D1) and the dividends are expected to grow at a constant rate of 3% forever. If the current price of the stock is $24 per share calculate the expected return or the cost of equity capital for the firm.            

    20%
                                         28%
                                         25%
                                         32%

Explanation / Answer

17.75% (using a financial calulator)

9.05%

24= 6/(r-.03)

r=28%

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