1A. A stock is currently trading on the market at $25 per share. It recently paid its annual dividend of $2, has a dividend growth rate of 5% and required rate of return of 11%. Value this stock and is it over or under valued:

a. 14.50 overvalued

b. 19.52 overvalued

c. 27.50 undervalued

d. 35.00 undervalued

1B. Biagio Fortuna deposits $3,000 a month, every month, for the next twenty years, in a utility fund. The fund is expected to pay 8.35% for the life of the fund. What will the balance in Biagio's account be when he plans to withdraw in twenty years. (compounded monthly)

a. 1,630,912.00

b. 1,845,930.87

c. 2,067,325.55

d. 2,569,329.49

1C. If the inflation rate over the next twenty years is expected to average around 3%, what is the funds estimated purchasing power in today's (2017) dollars. Re-work 1B using real rate of interest. (nominal minus inflation rate)

a. 1,051,322.11

b. 1,095,321.11

c. 1,144,683.35

d. 1,284,193.72

1D. A 12% coupon rate bond makes semi-annual interest rate payments. Par value is $1,000. The bond matures in 9 years. The required rate of return is 11.07%. What is the current price?

a. $1,015.15

b. $1,052.15

c. $1,063.31

d. $1,083.35

1E. A company's stock has a beta of 1.75. The risk free rate is 4.72%, and the expected rate on stocks is 10%. If a share of this comon stock has just paid a quarterly dividend of $.35, and the long-run growth rate is 5 percent, value this stock:

a. 16.41

b. 26.58

c. 32.25