A constant growth stock has a growth rate of 3 percent per year. This means that

Palmer Products has outstanding bonds with an annual 6.3 percent coupon.  The bonds have a par value of $1,000 and a price of $759.  The bonds will mature in   13 years. What is the yield to maturity on the bonds?

A 24-year bond with a 11.1 percent semiannual coupon and a $1,000 face  value has a nominal yield to maturity of 8.2 percent.  The bond currently sells for  $1,302.26. The bond, which may be called after 2 years, has a nominal yield to  call of 1.25% percent.  What is the bond’s call price?

A 16-year bond has a 5 percent annual coupon, a yield to maturity of 4 percent, and a face value of $1,000.  What is the price of the bond?

You intend to purchase a 25-year, $1,000 face value bond that pays interest of $58 every every 6 months.  If your nominal annual required rate of return is 11.2 percent with semiannual compounding, how much should you be willing to pay for this bond?

The last dividend paid by Klein Company was $1.6.  Klein’s growth rate is expected to be  a constant 6 percent for 2 years, after which dividends are expected to grow at a rate  of 4 percent forever.  Klein’s required rate of return on equity (rs) is 13.9 percent.   What is the current price of Klein’s common stock? 

You intend to purchase a 17-year, $1,000 face value bond that pays interest of $48 every every 6 months.  If your nominal annual required rate of return is 9.7 percent with semiannual compounding, how much should you be willing to pay for this bond?

Which of the following is not a stock market index?

A 12-year bond with a par value of $1,000 has a 14.7 percent annual coupon. The bond  currently sells for $886.  If the bond’s yield to maturity remains at its current rate,  what will be the price of the bond 2 years from now?

Womack Toy Company’s stock is currently trading at $60 per share.  The stock’s dividend  is projected to increase at a constant rate of 8.2 percent per year.  The required rate of  return on the stock, rs, is 12.4 percent.  What is the expected price of the stock 9 years  from today?