5

1. Sanaponic, Inc. will pay a dividend of $6 for each of the next 3 years, $8 for each of the years 4-7, and $10 for the years 8-10.Thereafter, starting in year 11, the company will pay a constant dividend of $7/year forever.If you require 16 percent rate of return on investments in this risk class, how much is this stock worth to you?
2. A. $41.46
3. B. $50.50
4. C. $45.68
5. D. $34.54
6. E. $37.77
7. F. $55.99

5 points

Question 6

1. Bonds of Riverhawk Sport Authority (RSA) are selling in the market for $1,092.01.These bonds carry a 10 percent coupon paid semiannually, and have 20 years remaining to maturity. What is the bond's yield to maturity?
2. A. 10.00%
3. B. 8.50%
4. C. 10.50%
5. D. 9.00%
6. E. 9.50%
7. F. 11.00%