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3.) Price the following bonds at discount rates of 10% and 15%. (Answers to a and d at 10% are given as follows: For the first bond, bond value = 1100/1.10 = 1000; for the last bond (d), bond value = $200/1.1+1200/(1.1)^2 = 1173.55)
a.) 1-yr. 10% coupon, face value = $1,000
b.) 30-yr, 10% coupon bond, face value = $1,000
c.) 2-yr, zero coupon bond, face value = $1,000
d.) 2-yr, 20% coupon bond, face = 1000
Answer your answers above describe, tell:
a.) what happened to the bond values as interest rate rose from 10% to 15%?
b.) which bond gained/lost proportionately more in value as interest rate rose. (hint - Find the percentage change in bond price as yield to maturity rose from 10 to 15%; then compare the results for a vs b and c vs d)
4.) In Yahoo!Finance, get a quote for AAPL; also use "key statistics" under "company" on the left hand side links to answer the following:
1.) What is the latest price of AAPL stock?
2.) What is AAPL's market capitalization?
3.) What are AAPL's 'trialing' annual dividend rate, dividend yield and dividend payout ratio?
4.) From 3 above, what percent of its earnings does AAPL retain (i.e. - its retained earnings or plowback ratio)?
5.) What are AAPL's trailing and forward P/E ratios?
6.) Is AAPL's P/E higher or lower than Facebook (FB)'s?
7.) Accounting issues/problems aside, what is the most likeley reason for the difference in P/E ratios?
