1. An issue of common stocks most recent dividend is $1.75. Its growth rate is 5.7%. What is its price if the markets rate of return is 7.7%?

2. Airborne Airlines Inc. has a $1,000 par value bond outstanding with 25 years to maturity. The bond carries an annual interest payment of $89 and is currently selling for $950. Compute the yield to maturity.

3. Midland Oil has $1,000 par value bonds outstanding at 9 percent interest. The bonds will mature in 25 years. Compute the current price of the bonds if the present yield to maturity is

1. 7 percent.

b. 10 percent.

c. 13 percent.

4. Determine the semi-annual interest payment for the following three bonds: 4 percent coupon corporate bond, 75 percent coupon Treasury note, and a corporate zero-coupon bond maturing in 15 years. (Assume a $1,000 par value.)

A) $4.00, $4.75, $0, respectively

B) $20.00, $23.75, $0, respectively

C) $20.00, $23.75, $150, respectively

D) $40.00, $47.50, $0, respectively