Please answer the following questions:

1. You are considering buying a perpetuity contract from your insurance company that will pay you $500 annually where the payment will grow by 3% each year. Using a discount rate of 9%, the most you should be willing to pay for this contract is closest to:

2. Mike stock just paid a dividend of $3.00 per share. Future dividends are expected to grow at a constant rate of 6% per year. What is the value of the stock if the required return is 12%?

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Assuming all CDs have equal risk, which of the following CD's investments has the highest effective annual return (EAR)? A bank CD that pays 8.78 percent compounded daily A bank CD that pays 9.01 percent compounded monthly A bank CD that pays 9 10 percent compounded quarterly A bank CD that pays 9 17 percent compounded semiannually Chilis is considering a fast food concession at the State Fair. The cash flow patten is somewhat unusual because you must buid the stands, operate them for 3 years, then tear down the stands and restore the site to its original condition Estimated cash flows are: cted Cash Flows ime 300,000 400,000 400,000 The IRR of this venture is closest to