1)A corporate bond has 20 years to maturity, a face value of $1,000, a coupon rate of 5% and pays interest twice a year. The annual market interest rate for similar bonds is 3.3%.

a) What is the price of the bond (in $)?

b) 2 years later, the market interest rate for similar bonds has gone up to 4.3%. What is the new price of the bond (in $)?

2) Forever 21 is expected to pay an annual dividend of $3.7 per share in one year, which is then expected to grow by 2% per year. The required rate of return is 14%. What is the current stock price?