NEU Business School Quiz #2 Instructor: Tang Vu Hung

E-BBA Program

Name: Nguyễn Thành Đạt - 11190998

1. BS-NEU Cor. Bond pays an annual coupon of 8%. It has 15 years to maturity and a face value of
100,000 VND.
(a) Draw a time line that shows this bond’s future cash flows. [1 pts]

(b) Set up the equation to caculate the value of BS-NEU’s bond if investors' required return is 15%.
(You do not need to calculate the answer; please just set up the math. Be sure to include as many
specific numbers as you can.) [2 pts]

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NEU Business School Quiz #2 Instructor: Tang Vu Hung
E-BBA Program

(c) Will this bond sell for a premium, at face value, or at a discount ? Why? [2 pts]

This bond sell for a discount, because its sell for 59k vnđ, lower than its face value
100,000vnđ

2. Consider a share of TVH Inc. stock that is expected to pay a dividend of $3.22 in 1 year and $4.00
in 2 years. In 2 years, you expect that you can sell the stock for $88.60.
(a) Draw a timeline that depicts the future cash flows for this stock. [1 pts]

(b) Using a required rate of return of 15%, set up the equation to calculate what you'd be willing to
pay for a share of TVH stock today. (You do not need to calculate the answer; please just set up
the math. Be sure to include as many specific numbers as you can.) [2 pts]

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NEU Business School Quiz #2 Instructor: Tang Vu Hung
E-BBA Program

3. A share of CCM, Inc. stock is currently selling for 100,000 VND. The share is expected to pay a
dividend of 9,000VND at the end of the year. Dividends are forecasted to grow at a constant rate
of 4% indefinitely. Calculate the expected return on CCM stock. Please show your work [2 pts]