solution

A stock will pay a dividend of $3.0 exactly one year from now. You
expect dividends to grow at 14% for the following 2 years and then a
constant 3.4% every year thereafter. If the stock’s required rate of
return is 12.8%, what is a fair price for the stock today? Round your
answer to the nearest penny.

A zero-coupon bond has a par value of $1,000 and 11 years
remaining until maturity. If the bond is priced with a yield-to-maturity
is 5.7%, how much should an investor expect to pay for it today? Use
semi-annual compounding in your calculations and enter your answer as a
positive number rounded to the nearest penny.

You purchase a stock today for $21.09. You expect to
receive a dividend in one year of $1.12. You also plan to sell the stock
for $22.53 after receiving the dividend. What is your expected dividend
yield? Enter your answer as a decimal and show four decimal places. For
example, if your answer is 2.54%, enter.0254.