1. Which of the following is the best definition of internal rate of return (IRR)?
a) IRR is the base rate of return that any investment must exceed.
b) IRR is an internal accounting rate used to set the discount rate.
c) IRR is used to evaluate and manage investment risk.
d) All high-risk investments must use a discount rate that exceeds the IRR
2. ABC stock has an expected ROE of 12%, expected EPS of $2, and expected dividends of $1.50. Its required rate of return is 10%. What are its expected growth rate and its price.
3. Calculate the price of a zero coupon bond that matures in 20 years if the market interest rate is 4 percent. Assume semi- annual compounding. I need it broken down into a formula please