Company Z-prime's earnings and dividends per share are expected to grow by 2% a year. Its growth will stop after year 4. In year 5 and afterward, it will pay out all earnings as dividends. Assume next year's dividend is $7, the market capitalization rate is 11% and next year's EPS is $12. What is Z-prime's stock price? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Stock priceIf a bond's yield to maturity does not change, the return on the bond each year will be equal to the yield to maturity. Confirm this for both a premium and a discount bond using a 4-year 4.5 percent coupon bond with annual coupon payments and a face value of $1,000. a. Assume the yield to maturity is 3.5 percent. b. Assume the yield to maturity is 5.5 percent. Complete this question by entering your answers in the tabs below. Required A Required B Assume the yield to maturity is 3.5 percent. (Do not round intermediate calculations. Enter "Bond price" answers to 2 decimal places and "Rate of return" rounded to 1 decimal place.) Bond price today Bond price in one year Rate of return % < Required A Required BCalculate the durations and volatilities of securities A, B, and C. Their cash flows are shown below. The interest rate is 10%. (Do not round intermediate calculations. Round "Duration" to 4 decimal places and "Volatility" to 2 decimal places.) A B C Period 1 75 55 45 Period 2 75 55 45 Period 3 110 190 180 Duration years years years Volatility
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