1. A treasury bond that matures in 10 years has a yield of 2.3%. A 10-year corporate bond has a yield of 7.6% and a liquidity premium of 1.2%. What is the default risk premium of the corporate bond?
None of the other answers
11.10%
8.70%
4.10%
6.50%
2. How much are you willing to pay for a 6% annual coupon bond with a 4.5% yield, which comes due in 12 years?
$2,623.72
None of these
$874.24
$1,136.78
$759.15
3. A stock is expected to pay a dividend of $2.00 each year for the next 3 years, after that the dividend is expected to grow at a constant rate of 7% per year forever. The stock s required rate of return is 10%. What is intrinsic value of the stock today?
$53.70
None of these
$58.57
$71.33
$21.05