1. Assuming a return on stocks of 15%, what is the value of a

company that pays a current dividend of $2.65 and will grow at 6% forever?

2. Assuming a return on stocks of 13%, what is the value of a company that pays a fixed dividend of $2.25 forever?

3. Assuming a return on stocks of 14%, what is the value of a company that pays a current dividend of $1.20 and will grow at 5% for 2 years and then 3% forever?

2. Calculate the price of a bond given the following info:

1. Face Value = $1000 Coupon = 5% Maturity = 3 years YTM = 5%

2. Repeat but at YTM = 7%