1) The Isberg Company just paid a dividend of $2.43 per share, and that dividend is expected to grow at a constant rate of 3.9% per year in the future. Investors expect a 7.4% rate of return on the stock. What is the company's current stock price, P0?
2) A 25-year, $1,000 par value bond has an 8.5% annual payment coupon. The bond currently sells for $900. If the yield to maturity remains at its current rate, what will the price be 5 years from now?