1. The risk-free rate of return is 5%, the required rate of return on the market is 10%, and High-Flyer stock has a beta coefficient of 1.5. If the dividend per share expected during the coming year, D1, is $2.50 and the dividend growth rate is 2%, what is the intrinsic value of the stock?
2. Suppose a? five-year, $1000 bond with annual coupons has a price of $903.21 and a yield to maturity of 5.5 %. What is the? bond's coupon? rate?