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Stock Price and Yield to Maturity on Bond

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A ten-year bond pays 11% interest on a $1000 face value annually. If it currently sells for $1,195, what is its approximate yield to maturity? (Show all work/calculations/formulas).

An issue of common stock has just paid a dividend of $3.75. Its growth rate is 8%. What is its price if the market's rate of return is 16%? (Show all work/calculations/formulas).

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Solution Summary

This solution discusses stock prices and yield to maturity of bonds.

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