1. A call provision allows bondholders to tender (turn in) their bonds at any time and receive the principal amount in return.
True or false
2. A company is expected to pay their first annual dividend 2 years from now. That payment will be $1.50 a share. Starting in Year 3, the company will increase the dividend by 5% per year. The required return from common shareholders is 15%. What is the estimated value of this stock today?
A. $12.10
B. $13.04
C. $15.28
D. $16.50
3. Moving Cash Flows
What is the value in year 3 of a $700 cash flow made in year 6 if interest rates are 10 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places.)