**Risk and Return Problem Sets (2)**

$ 12.00

Risk and Return | ||||||||||||||||||||||

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.) | ||||||||||||||||||||||

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? | ||||||||||||||||||||||

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? | ||||||||||||||||||||||

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

Estee Lauder | Lowes companies | |||||||||||||||||||||

Year 1 | 23.40% | -6.00% | ||||||||||||||||||||

Year 2 | -26 | 16.1 | ||||||||||||||||||||

Year 3 | 17.6 | 4.2 | ||||||||||||||||||||

Year 4 | 49.9 | 48 | ||||||||||||||||||||

Year 5 | -16.8 | -19 |

**Category:**Business, General Business

**Good_Morning**

- Ratings 3
- Grade:
**B-** - Questions 1
- Solutions 3084
- Blog 0
- Earned: $511.70