bond & stock 英文计算题附答案

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1、Topic3&4(StockandBondValuation)Seminar2StockValuation1.ABCindustrieshasasharepriceof£22today.IfABCisexpectedtopayadividendof£0.88thisyear,anditsstockpriceisexpectedtogrowto£23.54attheendoftheyear,whatisABC’sdividendyieldandequitycostofcapital?DividendYield=0.88/22.00=4%Capitalgainrate=

2、(23.54–22.00)/22.00=7%Totalexpectedreturn=rE=4%+7%=11%2.SupposeJohnson&Johnsonplanstopay£2.85pershareindividendsinthecomingyear.Ifitsequitycostofcapitalis9%anddividendsareexpectedtogrowby3%peryearinthefuture,estimatethevalueofJohnson&Johnson’sstock.P0=Div1R-gP0=£2.85(0.09-0.03)=£47.50•

3、Answer:Youwouldbewillingtopay16.7timesthisyear’sdividendof£2.85toownJohnson&Johnson’sstockbecauseyouarebuyingclaimtothisyear’sdividendandtoaninfinitegrowingseriesoffuturedividends.3.ThedividendofDenhamCompany,anestablishedtextilemanufacturer,isexpectedtoremainconstantat£3pershareindefi

4、nitely.WhatisthevalueofDenham’sstockiftherequiredreturndemandedbyinvestorsis15%?P0=£30.15=£204.Dotcomwillpayadividendof£1.50thisyear.IfyouexpectDotcom’sdividendtogrowby6%peryear,whatisitspricepershareifitsequitycostofcapitalis11%?P0=Div1R-gFundamentalsofFinance5Topic3&4(StockandBondVal

5、uation)P0=£1.50(0.11-0.06)=£301.Gillettecorporationwillpayanannualdividendof$0.65oneyearfromnow.Analystsexpectthisdividendtogrowat12%peryearthereafteruntilthefifthyear.Afterthen,growthwillleveloffat2%peryear.Accordingtothedividend-discountmodel,whatisthevalueofashareofGillettestockifth

6、efirm’sequitycostofcapitalis8%?P0=0.651.08+0.65(1.12)1.082+0.65(1.12)21.083+(0.65)(1.12)31.084+(0.65)(1.12)41.085+0.65(1.12)4(1.02)(0.08-0.02)1.085=$15.072.YouintendtopurchaseBama,Inc.,commonstockat$52.75pershare,holditoneyear,andsellafteradividendof$6.50ispaid.Howmuchwillthestockprice

7、havetoappreciateifyourrequiredrateofreturnis16percent?P0=+$52.75=+RearrangingandsolvingforP1:P1=$52.75(1.16)-$6.50P1=$54.69Thestockwouldhavetoincrease$1.94($54.69-$52.75)or3.6percent($1.94/$52.75)toearna16%rateofreturn.BondValuation3.A10-yeargovernmentbondhasafacevalueof100Eurosandan