1.EMKA corporation is going to pay a dividend of $0.5, $1.1, and $1.2 each year for the next three years. Afterwards, it is planing to increas the dividends at a constant rate of 10% indifinitely. How much should the stock be sold for if the required rate of return is 12%?

Select one:

a.$49.60

b.$48.17

c.$51.64

d.$50.2

2.

Sara just bought a stock for $267.5, and she expects to get a dividend of $71 and $100 for years one and two, respectively. Around how much should she expect to sell the stock in year 2? The required rate of return is 20%.

Select one:

a.$269

b.$225

c.$240

d.$200

3.

Lanker Enterprises has bonds on the market making quarterly payments, with 14 years to maturity, a par value of $1,000, and a price of $913. At his price, the bonds yield 9.5 percent. What must the coupon rate be on the bonds?

Select one:

a.3.02%

b.4.85%

c.3.56%

d.8.37%

4.

A bank offers 10.74% percent compounded daily on its business loans. Calculate the EAR.

Select one:

a.11.34%

b.11.03%

c.11.07%

d.10.47%

5.

Sarah wants to decide whether to take a project with an initial investment of $500, which yields $100 each year indefinitely, if the required rate of return for Sarah is 19%, what should be her decision?

Select one:

a.She should take the project

b.Not enough information

c.She shouldnt take the project

d.She will be indifferent

6.

Podalic, Inc., has 10% percent coupon bonds on the market with 12 years left to maturity. The bonds make semi-annual payments and have a par value of $1,000. If the bonds have a yield to maturity of 6.9 percent, what is the price?

Select one:

a.1796.31

b.$1250.22

c.$899.50

d.$1125.50