1. On October 30, 2017, Altria Group will issue an 8% coupon bond with $1000 par value andsemiannual coupon payments. The bonds will mature on October 30, 2027. Based on the pricesof bonds with similar risk characteristics, you have determined that the bonds should have ayield to maturity of 7.8%. What is the maximum price you would pay for the bond?

2. Consider the following two mutually exclusive projects:Year Project A Project B0 -180,000 -18,0001 50,000 10,0002 100,000 15,0003 150,000 12,000Calculate the internal rate of return, and net present value. Assume a discount rate of 15%.Which project should be selected?

3. IBM just paid a dividend of $1.2 per share. You expect IBM's dividend to grow at a rate of 10%per year for the next three years, and then you expect constant dividend growth of 5% forever.Based on the risk of IBM stock, you require a return of 12%. Using the dividend discount model,what is the value of IBM stock?

4. You plan to save for your retirement by depositing 15 payments of $10,000 into an accountevery other year. The first payment is made one year from today and the remaining 14payments come every other year (i.e. 1st payment is at year 1, 2nd payment at year 3, 3rdpayment at year 5,....,15th payment at year 29).You assume investments in this account willearn a nominal rate of return of 10%, compounded annually.a. What is the 2-year effective interest rate?b. What is the future value of your deposits at year 29?c. If you plan to make 10 annual withdrawals from your retirement account starting oneyear after your last deposit, how much will your annual withdrawal be?( using the samerate of return of 10%)