1. You just purchased a ten-year Canadian government bond with 4% coupon rate at $968.94. The calendar shows October 25, 2007. On June 30, 2006, the bond paid its last semi-annual coupon. If you have 365 days in a year, how much you actually pay for the bond?

 

2. If external funds are not available, what is the maximum dividend payout ratio for a firm with a return of equity of 15%, a debt-equity ratio of 60%, and an annual growth in sales of 9%?