FIN 370 Week 3 Risk and Return Problem Sets

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https://uopcourses.com/category/fin-370/


FIN 370 Week 3 Risk and Return Problem Sets
Complete the following problem sets from Chapter 7 in Microsoft® Excel®:

  • 7-21

  • 7-27 


Complete the following problem sets from Chapter 8 in Microsoft® Excel®:

  • 8-19

  • 8-21


Complete the following problem sets from Chapter 9 in Microsoft® Excel®:

  • 9-33


Click the Assignment Files tab to submit your assignment.
 
7-21 Compute Bond Price Compute the price of a 3.8 percent coupon bond with 15 years left to maturity and a market interest rate of 6.8 percent. (Assume interest payments are semiannual.) Is this a discount or premium bond? (LG7-4)
7-27 Yield to Maturity A 5.65 percent coupon bond with 18 years left to maturity is offered for sale at $1,035.25. What yield to maturity is the bond offering? (Assume interest payments are semiannual.) (LG7-6)

8-19   Value a Constant Growth Stock Financial analysts forecast Safeco Corp.’s (SAF) growth rate for the future to be 8 percent. Safeco’s recent dividend was $0.88. What is the value of Safeco stock when the required return is 12 percent? (LG8-5)
8-21   Expected Return Ecolap Inc. (ECL) recently paid a $0.46 dividend. The dividend is expected to grow at a 14.5 percent rate. At a current stock price of $44.12, what is the return shareholders are expecting? (LG8-5)

9-33  Risk, Return, and Their Relationship Consider the following annual returns of Estee Lauder and Lowe’s Companies:




 


Estee Lauder


Lowe's companies




Year1


23.40%


-6%




Year2


-26%


16.10%




Year3


17.60%


4.20%




Year4


49.90%


48%




Year5


-16.80%


-19%




 
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