Excel Hydro plans to raise $6.2 million to expand their business. To accomplish this, they...
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Excel Hydro plans to raise $6.2 million to expand their business. To accomplish this, they plan to sell 20-year, $1,000 face value, zero-coupon bonds. The bonds will be priced to yield 9.5%. The company plans on depositing $10,000 a year in real terms into your investment account for the next four years. The relevant nominal discount rate is 7.5% and the inflation rate is 4.2%.
1. Calculate the EPS of the company.
2. Calculate the Present value of the stock.
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