a). Four years ago, Lisa Stills bought six-year, 11.65 percent coupon bonds issued by the Fairways Corp. for $947.68. If she sells these bonds at the current price of $886.45, what will be her realized yield on the bonds? Assume similar coupon-paying bonds make annual coupon payments. (Round answer to 2 decimal places, e.g. 15.25%.)

Realised rate of return ____________%

b). The top prize for the state lottery is $104,860,000. You have decided it is time for you to take a chance and purchase a ticket. Before you purchase the ticket, you must decide whether to choose the cash option or the annual payment option. If you choose the annual payment option and win, you will receive $104,860,000 in 25 equal payments of $4,194,400one payment today and one payment at the end of each of the next 24 years. If you choose the cash payment, you will receive a one-time lump sum payment of $56,835,619.61. At what interest rate would you be indifferent between the cash and annual payment options? (Round answer to 0 decimal places, e.g. 15%.)

Interest rate ________________%

c). Fresno Corp. is a fast-growing company that expects to grow at a rate of 20 percent over the next two years and then to slow to a growth rate of 16 percent for the following three years. If the last dividend paid by the company was $2.15.

What is the dividend for 1st year? (Round answer to 3 decimal places, e.g. 15.250.)

D₁ $ _________________

What is the dividend for 2nd year? (Round answer to 3 decimal places, e.g. 15.250.)

D₂ $ _______________