1. Consider a 20-year 8% coupon-paying bond with a face value of $1,000 that pays interest semi-annually. If the yield to maturity is stated to be 6% annually, what is the price of this 20-year 8% coupon bond that pays interest semi-annually? Be sure to clearly set up this problem and do the mathematical computations to generate the answer.

2. There is a zero coupon bond with a face value of $1,000 that will mature in 7 years. If it has a price of $743.00 today, what is its yield to maturity?

3. What is the value or price today of a $1,000 face value 6% coupon rate 10-year bond with a yield to maturity of 5% that pays interest annually? Provide your price or value to at least 6 decimals.

4. Once again consider this same 6% coupon paying bond from the question immediately before and assume you bought that bond at the price you calculated above out to at least 6 decimals. Also, assume it is now two years after you purchased that bond and you have just received the interest payment due at the two year time point. You have noted that bond yields have changed over the two year time period and for a number of reasons you have decided to sell the bond. Just after the year two interest payment has been made, the current market yield to maturity required by purchasers of that bond is 4%. If just after the year two interest payment has been made to you, you sell the bond at the appropriate market price, what will be the annual return or yield you will have actually earned for the two years you owned the bond? Be sure to clearly show your computational process as you work toward your answer.

8. Currently, the Ruskin Company does not pay dividends to its shareholders and this will continue throughout the upcoming three years of business activity. However, it will begin to pay a dividend of $50 per share 4 years from today. After that payment, the dividend will grow at an annual rate of 10% per year for two years. After those two years, the dividend will grow at an annual rate of 4% forever. If the Ruskin Company has an equity cost of capital of 9%, what is its per share price today?

9. Please calculate the per share value today of Bentley Company common stock based on the following information. The company will have earnings per share of $20 one year from now. Further, the company will retain or reinvest 100% of its earnings back into the company for internal projects and be able to earn a 20% return on those reinvested project funds during years 2, 3, and 4. To be clear, "during year 2" means the time between year 1 and year 2 on a time line; "during year 3" means the time between year 2 and year 3 on a time line, and "during year 4" means the time between year 3 and 4 on a time line. Beginning with the resultant earnings outcome at time period 4, there will be a change in the Bentley Company's reinvestment outcome. Specifically, beginning with the resultant earnings outcome at time period 4, the company will reinvest only 25% of its earnings back into the company and it will only be able to earn a 12% return on those reinvested funds. This 25% retention rate and 12% reinvestment return will continue forever. For your work assume the equity cost of capital, at times referred to as the market capitalization rate, for Bentley Company is 10%.