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**Valuation and Characteristics of Bonds and Stocks**

Complete the following problems:

- Problem 10-1: Bond Valuation 1
- Problem 10-2: Bond Valuation 2
- Problem 10-3: Bond Valuation 3
- Problem 10-4: Preferred Stock Valuation
- Problem 10-5: Common Stock Valuation 1
- Problem 10-6: Common Stock Valuation 2
- Problem 10-7: Cost of Trade Credit
- Problem 10-8: Cost of Commercial Paper

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Complete the problems in an Excel spreadsheet. Be sure to show your work to receive credit

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Hello, please find the attached solution. I have provided formulas for all the answers. Double click on cells to see the formulas. Please let me know if you have any question.Thanks

Module 10 CT PROBLEMS

VALUATION AND CHARACTERISTICS OF BONDS AND STOCKS

CT 10 - 1

BOND VALUATION

Calculate the value of a bond that will mature in 20 years and has a SAR 1,000 face value. The annual coupon

interest rate is 5 percent, and the investor's required rate of return is 7 percent. Interest is paid annually.

DATA

Years

Face value

Interest

Required rate of return

Present Value = FV [1/(1+R)ᴺ]

Pv annuity= PMT[1-(1+r)¯ᴺ/r ]

Value of Bond

20

1,000

5.0%

7.0%

258.42

529.70

788.12

NPER

FV

50 PMT

Rate

CT 10 - 2

BOND VALUATION 2

Calculate the value of a bond that will mature in 12 years and has a SAR 2,500 face value. The interest rate is 10

percent and is paid semi-annually, and your required rate of return is 4 percent. (a) What is the value of the bond?

(b) What is the value of the bond if interest is paid annually instead of semianually?

DATA

Coupon rate

10.0%

250

125 PMT

Times interest paid

2

Years to Maturity

12

24

NPER

Par Value

2,500

FV

Required rate of return

4.0%

0.02

Rate

A) Present value =

(3,918.54)

B) If the interest is annual =

(3,907.76)

CT 10 - 3

BOND VALUATION 3

Bisha Corporation issued a bond with a SAR1,200 par value that pays SAR 72 in annual interest. The...

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