JRN Enterprises just announced that it plans to cut its next-year dividend, D1, from $2.50 to $1.40 per share and use the extra funds to expand its operations. Prior to this announcement, JRN's dividends were expected to grow at 4% per year and JRN's stock was trading at $24.50 per share. With the new expansion, JRN's dividends are expected to grow at 8% per year indefinitely. Assuming that JRN's risk is unchanged by the expansion, the value of a share of JRN after the announcement is closest.

A bond has ten years to maturity, a $1,000 face value, and a 5.7% coupon rate with annual coupons. What is its yield to maturity if it is currently trading at $745? 

Sara wants to have $600,000 in her savings account when she retires. How much must she put in the account now, if the account pays a fixed interest rate of 10%, to ensure that she has $600,000 in 25 years time?

An annuity pays $12 per year for 56 years. What is the future value (FV) of this annuity at the end of that 56 years given that the discount rate is 5%?

What is the present value (PV) of $40,000 received thirty years from now, assuming the interest rate is 4% per year

The Sisyphean Company has a bond outstanding with a face value of $5,000 that reaches maturity in three years. The bond certificate indicates that the stated coupon rate for this bond is 8.3% and that the coupon payments are to be made semiannually. Assuming that this bond trades for $5,233, then the YTM for this bond is closest to:

A company issues a ten-year bond at par with a coupon rate of6.3% paid semi-annually. The YTM at the beginning of the third year of the bond (8 years left to maturity) is 9.4%. What is the new price of the bond?

Martin wants to provide money in his will for an annual bequest to whichever of his living relatives is oldest. That bequest will provide $8,000 in the first year, and will grow by 6% per year, forever. If the interest rate is 10%, how much must Martin provide to fund this bequest?

A stock is bought for $21.00 and sold for $26.50 one year later, immediately after it has paid a dividend of $1.50. What is the capital gain rate for this transaction?

An annuity is set up that will pay $1,300 per year for ten years. What is the present value (PV) of this annuity given that the discount rate is 7%?

 

Dan buys a property for $300,000. He is offered a 30-year loan by the bank, at an interest rate of 6% per year. What is the annual loan payment Dan must make?

 

What is the present value (PV) of an investment that will pay $300 in one year's time, and $300 every year after that, when the interest rate is 5%?

Avril Synchronistics will pay a dividend of $1.20 per share this year. It is expected that this dividend will grow by 6% each year in the future. What will be the current value of a single share of Avril's stock if the firm's equity cost of capital is 16%? 

A $1,000 bond with a coupon rate of 5.7% paid semiannually has ten years to maturity and a yield to maturity of 9%. If interest rates rise and the yield to maturity increases to 9.3%, what will happen to the price of the bond?