Risk and Return Problem Sets

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** Please see attached file ** (excel spreadsheet and problem to solve 9-33 )

 


Complete the following problem sets from Chapter 7 in Microsoft® Excel®:

 

  • 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.)

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

 

  • 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?
  • 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?

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

 

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

           Estee Lauder               Lowe's Companies

Year 1                        23.4%                                -6.0%

Year 2                        -26.0                                   16.1

Year 3                         17.6                                     4.2

Year 4                         49.9                                    48.0

Year 5                        -16.8                                   -19.0

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  • ** Please see attached file **

    (excel spreadsheet and problem 9-33)


    Completethe following problem sets from Chapter 7 in Microsoft®Excel®:

    • 7-21 Compute Bond PriceCompute …