Question

please show your work.

This is the information for the problems l, 2,3, 4 and 5. Darby Inc.'s bonds currently sell for S 900 nve u par value of $1,000. They pay a S65 annual coupon and have a 1S-year maturity, but they can be called in 5 years at $1,020. 1. This bond is a discount bond. a. True b. False 2. What is their yield to maturity (YTM)? a. 5.78% b. 7.64% с 6.39% d. 6.71% e. 7.05% 3. What is their yield to Call (YTC)? a. 5.78% b. 6.09% c. 6.39% d. 9.43% e. 7.05% 4. What is their Expected Current Yield (CY)? a. 5.78% b. 6.09% c. 6.39% d. 72200 e. 7.05% 5. What is their Capital Gain Yield (CGY)? 5.78% b. 6.09% c. 0.42% d. 0.65% e. 7.05% 6, Gibson, Motors has a beta of 1.30, the T-bill rate is 3.00%, and the Tbond rate is 6.5%. The annual return on the stock market during the past 3 years was 15.00%, but investors expect the annual future stock market return to be 13.00%. Based on the SML, what is the firm's required return? a. 13.51% b. 13.86% c. 14.21% d 14.58% e. 14.95% 7, Newsome's stock has a beta of 1.23, its required return is 11.75%, and the risk-free rate is 4.30%. What is the required rate of return on the market? (Hint: First find the market risk premium.) a. 10.36% b. 10.62% c. 10.88% d. 11.15% e. 11.43% For 8.-11. Show your works. A 10-year, 10% semiannual coupon bond selling for S 1,130.90 can be called in 5 years for $1,050 (hint: par value is $1,000). 8. Draw the Time line? Show your work. 9.What is its yield to maturity (YTM)? Show your work. 10. What s its current yield (CY)? Show your work? 11.What is its yield to call (YTC)? Show your work.