1. If you purchase a 5-year, zero-coupon bond for $691.72, how much could it be sold for 3 years later if interest rates have remained stable? Show your calculations!

1. 1. $848.12 B. $923.50 C. $862.92
2. 3. $911.15

2. What is the expected constant-growth rate of dividends for a stock currently priced at $50, that just paid a dividend of $4, and has a required return of 18%? Show your calculations!

1. 3.41%
2. 5.50% C. 9.26% D. 12.5%

3. What should be the current price of a share of stock if a $5 dividend was just paid, the stock has a required return of 20%, and a constant dividend growth rate of 6%? Show your calculations!

1. $19.23 B. $25.00 C. $35.71 D. $37.86