CHAPTER 5: PROBLEM 2

A.

Settlement (Think of Settlement as the beginning of the duration of the bond.)

Maturity (Think of Maturity as the end of the duration of the bond.)

Rate (Coupon Rate)

YTM (Yield to Maturity or Required Rate of Return)

Redemption (Bonds Face Value Par Value or Fair Price; Note that is $100 not $1000. You make the adjustments by multiplying the answer by 10.)

Frequency (Coupon payments are semiannual so you put in a 2. If they are annual then you input a 1.)

Basis (Always leave it blank.)

Bond Price (The answer. But you need to multiply it by 10 to get the actual bond price.)

Multiply by 10 (Microsoft gives the bond price in 2 digits. You need to multiply it by 10 to get the actual bond price.)

CHAPTER 5: PROBLEM 3

Settlement (Think of Settlement as the beginning of the duration of the bond.)

Maturity (Think of Maturity as the end of the duration of the bond.)

Rate (Coupon Rate)

Pr (The bonds price per $100 face value)

Redemption (Bonds Face Value Par Value or Fair Price; Note that is $100 not $1000.)

Frequency (Coupon payments are semiannual so you put in a 2. If they are annual then you input a 1.)

Basis: (Always leave it blank.)

YTM

CHAPTER 6: PROBLEM 2

Dividend Payment $2.85

Dividend Growth Rate 4.50%

ZYX Stock Price $84

Required Return =

CHAPTER 6: PROBLEM 4

Dividend $2.90

Dividend increase per year 4.75%

Required Return (Return on Investment) 11%

Stock Price =