Economics Homework Help. Saudi Electronic University Finance Question
I’m trying to study for my Finance course and I need some help to understand this question.
Q1: AL-Olaa’s bonds pay a 5% coupon and mature in 3 years, what is their market value, assuming an 8% yield to maturity?Assume the bond has a $1,000 par value. (Show the details of your calculations).
Q2: What would you estimate to be the required rate of return for equity investors if a stock sells for $40.00 and will pay a $4.40 dividend that is expected to grow at a constant rate of 5%? (Show the details of your calculations).
Q3: How it describes the differences between mergers and leveraged buyouts? (You have to mention an academic reference)
Q4: In December 2007, a call option on Google stock with a June 2008 expiration and an exercise price of $720 sold for $80.50. If you bought this call, you gained the right to purchase Google shares for $720 at any time until the option expired in June. The price of Google in December was $720. If the stock price did not rise by June, the call would not be worth exercising, and you would lose your investment of $80.50. On the other hand, even a relatively modest rise in the stock price could give you a rich profit on your option. For example, if Google sold for $840 in June, the proceeds from exercising the call would be:
Q5 :Recognize how changes in supply and demand affect market outcomes and explain the effect of government regulation on prices?
