1. A bank stock is currently paying $2.53 in dividends per year. The bank grows slowly, at about 1% per year. Given a required rate of return of 12% per year, what is the current stock price?
2. A restaurant chain company named Fatso's Burgers is currently paying out $3.39 per year in dividends and is forecast to grow at 6% per year. Based on a 12% required rate of return, what is the stock price?
3. A bond has a face value of $1,000. The bond matures in 10 years. It has a coupon rate of 8% and pays interest annually. The yield is 9%. What is the price of the bond?
4. A bond has a face (par) value of 10,000. It matures in 20 years. The bond has an annual coupon of 9%. Based on a market rate (yield) of 7%, what is the current price of the bond?