1)What is the duration of a ten-year zero coupon bond with a YTM of 7%, par value of $1,000, and a AAA credit rating?

a) 2 years

b) 7 years

c) 10 years

d) none of the above

2)MyWay corporation has an expected ROE of 15%. It pays out 30% of it earning as dividends and its current dividends are $100/share what is the expexte dividend next year?

a) 108.0

b) 109.1

c) 110.5

d) 113.2

3)Mamamia Motorcycle Company is expected to have free cash flows to the firm of$2 million in year 0. Assuming the free cash flow to firm grows at 10%/year for 2 years and then grows at a constant rate of 2%, calculate the value per share of stock. Assume the cost of equity is 15%, cost of debt is 10%, tax rate is 40%, E/V = 60%, D/V = 40%, total debt = $5 million, and there are 2 million shares outstanding. Choose the closest answer below.

a) 8

b) 9

c) 10

d) 11

4)Estimate the value of a share of stock given the following information: a forward PE ratio of 12, current (year 0) EPS of $1 and analyst expected EPS of $1.1 next year.

a) 10.9

b) 12.0

c) 13.2

d) 13.6