1. Next year, Stock B is expected to pay $0.25 quarterly dividend, if the earnings and dividends are expected to continue growing at a rate of 6%, what is the stock worth to an investor who has a required rate of return of 12%?
2. Over the last 7 years dividends of AB Corp. have grown from $0.24 to the current level of $0.54, using your financial calculator, find the compound annual growth rate.
3. You would like to purchase a bond, your required rate of return is 8.5%. You find a bond paying a 8.25% coupon rate, that matures in 12 years, and pays semi-annual coupon rates. How much are you willing to pay for this bond, if you will get $1,000 at maturity.