Financial Management u5 2-5
Hello, I have four more questions listed below. Thank you
(Q2)Valuation – preferred stock
What is the value of a share of preferred stock that pays a $4.50 dividend, assume k is 10%
(Q3) Valuation – preferred stock
What is the value of a share of preferred stock that pays a $9.50 dividend, assume k is 12%.
(Q4)Valuation – zero-coupon bond
A U.S. Government bond with a face amount of $10,000 with 13 years to maturity is yielding 5.5%. What is the current selling price?
(Q5)Valuation – options
The following information refers to a six-month call option on the stock of XYZ, Inc.
- Price of the underlying stock: $50
- Strike price of the three-month call: $45
- Market price of the option: $10
a) What is the intrinsic value of the option?
b) What is the option’s time premium at this price?
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