1.

Silver Run Inc. has 6% coupon bonds outstanding that pay interest semiannually and have 15 years remaining until maturity. They carry a face value of $1000. These bonds are currently selling for $1143. What price should these bonds sell for two years from now if their yield drops by 100 basis points over the two years?

		$1030.62
		$817.24
		$1044.66
		$1006.27
		$1239.88

2. Data for all Dixon Corp. problems are the same. Dixon Corp. just paid out a dividend of $4.50 per share of common stock. Analysts expect the dividend to grow by 17% over the coming three years and then grow steadily at 5% for the foreseeable future after that. Investors require a return of 8% on this stock. The discounted value at the end of year 3 of all dividends to come after year 3 equals:

		$216.13
		$244.10
		$259.46
		$252.25
		$208.12