7. What is the current yield on a bond that has the following characteristics: (

Question

7. What is the current yield on a bond that has the following characteristics: (a) Price: $956.20, (b) Coupon Rate: 6.5%, (c) YTM: 7.5%, and (d) NPER: 23.

8. What is the Expected Rate of Return on Stock XYZ given the following information (Use CAPM): (a) Expected Return on the Risk Free Asset: 1%, (b) Expected Rate of Return on the Market: 6.3%, and (c) Beta for XYZ Stock: 1.32.

9. What is the Beta for XYZ Company, given the following information: (a) Expected Return on Company XYZ’s Stock: 23.20%, (b) Expected Return on the Risk Free Asset: 5%, and (c) Expected Rate of Return on the Market: 15.50%.

Explanation / Answer

7)

Current yield:

= Annual coupon payment÷Price

= $65÷$956.20

= 6.8%

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