1. You have a stock that is expected to pay a $4.1 dividend one year from now. Thereafter, you expect annual dividends to experience a constant grow of 4% p.a. forever. If the appropriate discount rate is 16% p.a., what is the duration of this stock?
2. How is an option contract under the common law rules similar to or different from a Merchant's firm offer under the Uniform Commercial Code?
3. A firm has a debt-equity ratio of .5 and a tax rate of 40 percent. Its cost of equity is 10 percent and its pre-tax cost of debt is 8 percent. What is the firm’s WACC?