1. Tru-U stock is selling for $41 a share. A 6-month call on Tru-U stock with a strike price of $45 is priced at 1.60. Risk-free assets are currently returning .29 percent per month. What is the price of a 6-month put on Tru-U stock with a strike price of $45?
2. Universal Exports is expected to pay the following dividends over the next four years: $8, $4, $2, and $2. Afterwards the company is expected to maintain a constant 4 percent growth rate in dividends. If the required return is 15 percent, what is the maximum that you would be willing to pay for a stock of Universal today? (Show your work)