1. MainCup Inc. just paid a dividend of $2.50 per share. The dividends are expected to increase by 20 percent per year for the next two years and then increase by 3 percent annually thereafter. What is the current value per share is the appropriate discount rate is 12 percent?
A. $35.52 B. $38.39 C. $41.27 D. $45.69
2. You are purchasing a bond with a face value of $1,000 and a coupon rate of 8.85 percent. The bond pays interest semiannually and has a yield to maturity of 7.23 percent. The bond matures in 6.5 years and pays its next interest payment in four months. What amount of accrued interest must you pay to purchase this bond today?
A. $59.00 B. $29.83 C. $14.75 D. $18.75