1. You buy a(n) eleven-year bond that has a 8.00% current yield and a 8.00% coupon (paid annually). In one year, promised yields to maturity have risen to 9.00%. What is your holding-period return? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
2. Assume Highline Company has just paid an annual dividend of $0.94. Analysts are predicting an 11.6% per year growth rate in earnings over the next five years. After? then, Highline's earnings are expected to grow at the current industry average of 5.3% per year. If? Highline's equity cost of capital is 8.4% per year and its dividend payout ratio remains? constant, for what price does the? dividend-discount model predict Highline stock should? sell?