2.1. Algeria Corporation 4.25s20 bonds are selling at 9

2.1. Algeria Corporation 4.25s20 bonds are selling at 96. The bonds pay interest semiannually. If your required rate of return is 5% would you buy these bonds in 2011?2.2. Benin Company 9% coupon bonds pay interest semiannually. When you bought one of these bonds it had 12 years to maturity and the appropriate discount rate was 7%. After one year the discount rate on such bonds is 6% because of the improved financial health of the company. If you sell the bond today what would be your capital gain?2.3. Chad Corporation 6s16 bonds pay interest semiannually and will mature on October 8 2016. If your required rate of return is 9% per annum how much should you pay for a $1000 bond on October 9 2011?2.4. Djibouti Corporation bonds pay interest semiannually and they will mature after ten years. The required rate of return by the bondholders is 12% per annum and the face amount of the bond is $1000. If the market price of the bond is $885.30 find its coupon rate.2.5. Ethiopia Corporation stock currently pays $3 annual dividend and sells at $54.25 per share. The company expects to show continued growth at the rate of 11% per annum. Find the required rate of return by the stockholders.2.6. Ghana Company stock paid a dividend of $2.00 last year and $2.10 this year. The increase in the dividend is similar to the long-term growth of the company. Considering the risk your required rate of return from this stock is 12%. Find the price of the stock.2.7. Kenya Company stock is $65 a share and it has paid a dividend of $5 this year. The required rate of return for Kenya shareholders is 13%. What is the expected growth rate of Kenya?2.8. Liberia Company preferred stock pays a quarterly dividend of $1.50 and the stockholders have a required rate of return of 15% annually on their investments. Assuming quarterly compounding find the price of a Bradford preferred share.
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