1. Dividends are expected to grow at 30 % per year during the next three years , with the growth rate falling off to a constant 7 % thereafter . If the required return is 13 % and the campany just paid a $ 15,20 dividend , what is the current share price ?

2. You are looking at two savings accounts . One pays 5.25 % , with daily compounding . The other pays 5.3 % with semiannual compounding . Which account should you use ?

3. Cash flows from an investment are expected to be $ 40,000 per year at the end of years 4 , 5 , 6 , 7 , and 8. If you require a 20 % rate of return , what is the PV of these cash flows ?

4 . Suppose that you are to make annual deposit of $ 3,000 into a retirement account that pays 11 % interest compounded monthly . How large will your account balance be in 20 years .

5. Considering a bond issued by Toyotta date of 2012 and a stated annual coupon rate of 8 percent . The bond makes semiannual payments . In December 2007 , with five years left to maturity , investors owing the bonds were requiring a 10 percent rate of return . Calculate the the value of the bond ? Is this bond a discount bond or a premium bond ?

6 . If you borrow $ 100,000 for 30 years in order to buy a house and the interest rate is 7 % per year , what will be your monthly house payment ?

7 . . Upon retirement , your goal is to spend 5 years traveling around the world . To travel in style will require $ 250,000 per year at the end of each year . If you plan to retire in 30 years , what are the equal monthly payments necessary to achieve this goal ? Interest rate is 10 % per year .

8 . You want to be a millionaire when you retire in 40 years . How month do you have to save each month if you can earn a 12 percent annual return .

9 . You have determined that you can afford to pay $ 632 per month toward a new Italian sports car . You call up your bank and find out that the going rate is 12 % compounded monthly for 5 years . How much can you borrow ?