A share has a market price of £2.50. It is expected to be able to pay a steady dividend of 30 pence per share each year starting in one year's time. There will not be any growth in dividends. The required return on the share is:

Other things being equal, if the expected dividend went up to 33 pence we would expect:

Returning to question 1, other things being equal, if the required return went up to 15% the effect would be:

Other things being equal when a share goes ex div we would expect:

A company has experienced steady growth in earnings and this is reflected in its dividend payments. This is expected to continue. Four years ago its dividend was 65p and the dividend just paid was 79p. If the price of a share is £3.90, what is the implied cost of capital?

A perpetual bond of £100 was issued at an interest rate of 5%. If the current market rate is 3.75% the bond will be worth:

A company has just issued a zero coupon bond for £5m. It will be redeemed for £7m in four years time. Its effective interest rate is:

Convertible debt is cheaper than standard debt because:

Chelsea Pensioner plc has issued convertible bonds with a coupon of 4%. Each bond has a nominal value of £100 and will be redeemed in two years time. The current market rate for debt of this risk class is 6.5%. Each bond can be converted to 20 shares and at the moment shares are trading at £5.05. The minimum value of the bond at the moment is:

If a bond with a face value of £100 is issued for £95 with a coupon of 2% it is a: