Use the appropriate factors from Table 6-2 or Table 6-3 to answer the following question.
(a.) Vincent Co.'s common stock is expected to have a dividend of $7 per share for each of the next five years, and it is estimated that the market value per share will be $65 at the end of five years. If an investor requires a return on investment of 14%, what is the maximum price the investor would be willing to pay for a share of Vincent Co. common stock today?
(b.) Aliyana bought a bond with a face amount of $1,000, a stated interest rate of 14%, and a maturity date 20 years in the future for $990. The bond pays interest on a semi-annual basis. Eight years have gone by and the market interest rate is now 12%. What is the market value of the bond today?

Question

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The Answer of Use the appropriate factors from Table 6-2 or Table 6-3 to answer the following question.
(a.) Vincent Co.'s common stock is expected to have a dividend of $7 per share for each of the next five years, and it is estimated that the market value per share will be $65 at the end of five years. If an investor requires a return on investment of 14%, what is the maximum price the investor would be willing to pay for a share of Vincent Co. common stock today?
(b.) Aliyana bought a bond with a face amount of $1,000, a stated interest rate of 14%, and a maturity date 20 years in the future for $990. The bond pays interest on a semi-annual basis. Eight years have gone by and the market interest rate is now 12%. What is the market value of the bond today?

Use the Appropriate Factors from Table 6-2 or Table 6-3